WSJ Tech News Briefing TNB Tech Minute: Microsoft Earnings Indicate OpenAI Suffered a $12 Billion Loss Last Quarter
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Oct 31, 2025 Microsoft's hefty $4.1 billion investment in OpenAI reveals a staggering $12 billion loss for the AI giant. Meanwhile, tech companies are racing to build AI data centers, flooding the debt markets with mega-deals from Oracle and Meta. On the telecommunications front, Charter Communications faces a decline in profits, grappling with a shrinking internet subscriber base and challenges in its TV business. A fascinating look at the intertwining fortunes of tech companies!
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OpenAI's Massive Quarterly Loss
- Microsoft's $4.1 billion write-down implies OpenAI lost over $12 billion in one quarter.
- The scale signals that leading AI startups may incur historically large, multi-quarter losses as they scale.
AI Data Centers Flood Debt Markets
- The AI data-center buildout boom is pushing companies into debt markets with huge bond deals.
- Hyperscalers cannot self-fund AI scale with operating cash flow and are relying on debt to finance expansion.
Hyperscalers Can't Self-Fund AI Buildouts
- Bank of America estimates hyperscalers would need 94% of operating cash flow to self-fund AI builds.
- This math explains why firms turn to debt investors instead of funding entirely from operations.