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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/

The estimated cost of Oracle's 7.1GW of planned Stargate capacity is around $340 billion, with ongoing annual costs of around $13 billion. Even if Oracle paid in cash, it would take years to break even. It's paying in hundreds of billions in debt. 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/

Although Oracle has managed to keep some debt off its balance sheet by using special purpose vehicles, it remains liable for the cost - a demand made by its creditors for Michigan and other data centers. Even if OpenAI dies, Oracle MUST pay the debt. www.wheresyoured.at/how-openai-kills-oracle/

Oracle has loaded up with long-term debt and lease commitments, and the only way it pays them is if OpenAI doesn’t just survive, but grows by 10x in the next four years, while also bringing in unprecedented levels of investment capital and debt. www.wheresyoured.at/how-openai-kills-oracle/

OpenAI’s failure wouldn’t just be fatal for Oracle, but also Oracle founder Larry Ellison, who has pledged 346 million of his Oracle shares - $61.5 billion - for an estimated $21bn+ in personal loans that will face margin calls if stock prices drop. www.wheresyoured.at/how-openai-kills-oracle/

And so, the future of Oracle — and Larry Ellison — depends on Sam Altman making or raising $852 billion in 4 years, or the company finding someone else to pay $75bn for AI compute using years-old GPUs. Best of luck, Larry! You’re going to need it. www.wheresyoured.at/how-openai-kills-oracle/

Yes it will happen but no. If it's happening before 2029 he will be saved by Trump and a bail out will be on the table for giving the illusion of no collapse. And Dems are stupid enough to go all in for a bail out.

Yep I will do it.