The Investing for Beginners Podcast - Your Path to Financial Freedom Don't Get Too Excited About AI Headlines Hype. Here's Why
Oct 16, 2025
The hosts dive into the buzz surrounding AI investments, spotlighting a staggering $400 billion deal between OpenAI and Oracle. They voice skepticism about OpenAI's ability to meet such commitments and highlight the opacity of private AI firms' financials. The discussion also compares current AI hype to the dot-com bubble, emphasizing the difficulty in pinpointing future tech winners. Exploring the role of major cloud players, they stress the importance of cautious investment and the need for diversification in the face of uncertain timelines.
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Questionable Scale Of Oracle–OpenAI Deal
- Oracle's reported $400 billion deal with OpenAI looks impressive on headlines but may be unrealistic given OpenAI's private finances.
- Lack of public financials makes it hard to verify demand and viability of such massive commitments.
Profitability Gap Versus Big Commitments
- OpenAI reportedly isn't profitable, so huge multi-hundred-billion dollar payments raise questions about who funds the CapEx.
- Converting $12–$13B projected revenue into $400B commitments seems implausible without external financing.
Read Beyond AI Headlines
- Don't buy headline hype; investigate underlying capacity, cash flow, and who bears the build-out costs before investing.
- Demand claims from private firms require skepticism because investors lack access to audited financials.
