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Premium Newsletter: OpenAI needs to raise or make $852 billion through 2030 to pay for its compute costs, and must pay $75bn a year for Oracle's 7.1GW of Stargate data centers, or Oracle will collapse, destroying its share price and Larry Ellison's entire empire. www.wheresyoured.at/how-openai-k...

It’s been little over a year since Sam Altman, Masayoshi Son, and Larry Ellison stood shoulder-to-shoulder with Donald Trump to announce the "$500 billion" Stargate data center project. In truth, no entity was ever formed, and no money was invested. www.wheresyoured.at/how-openai-kills-oracle/

The "$500 Billion" Stargate data center project is really a $340 billion, 7.1GW Oracle-and-debt-funded construction nightmare. Outside of Abilene - which existed before the announcement - these data centers are mostly scaffolding and steel beams. www.wheresyoured.at/how-openai-kills-oracle/

Stargate is entirely built to provide compute to one customer - OpenAI. Oracle is spending around $48 million per megawatt on each data center, financed with off-balance-sheet debt funneled through SPVs. Even then, Oracle is fully responsible. www.wheresyoured.at/how-openai-kills-oracle/

Stargate and OpenAI pose an existential threat to Oracle's future, as its existing business segments are plateauing, and it had negative $24.7 billion in free cash flow last quarter, meaning that it cannot pay its debts without OpenAI's revenue. www.wheresyoured.at/how-openai-kills-oracle/

Part of the problem is that Stargate’s data centers take years to build, with each structure engineered to accommodate a particular kind of GPU. By the time that Stargate Abilene goes live in Q1 2027, its GB200s will be two years old. www.wheresyoured.at/how-openai-kills-oracle/

I estimate that Stargate Abilene, on completion, will around $10 billion in annual revenue for a 1.2GW campus that will cost roughly $60 billion to complete, with ongoing costs of over $2bn a year and depreciation of $5bn+. Oracle needs OpenAI to pay. www.wheresyoured.at/how-openai-kills-oracle/

Based on its own projections reported by The Information, OpenAI has estimated it will burn $852 billion through 2030, and make $673 billion in revenue, magically becoming profitable in 2030. It HAS to make this much, or it cannot pay its compute costs. www.wheresyoured.at/how-openai-kills-oracle/

Even if OpenAI successfully makes and raises $852 billion by the end of 2030, Oracle will still need to raise another $100 billion to $200 billion in debt, and I'm not confident it even has the money to finish Stargate Abilene. This is a disaster. www.wheresyoured.at/how-openai-kills-oracle/

Oracle is running into trouble raising further debt, with banks refusing to finance its further extensions of Stargate Abilene because banks refused to provide additional funds if it was the tenant. Banks are also having trouble selling Stargate debt. www.wheresyoured.at/how-openai-kills-oracle/