Lian Loo @Chongloo: "Is the ORCL & OpenAI..."

Singapore

Is the ORCL & OpenAI deal still intact? Some media headlines made it sound like the partnership between Oracle and OpenAI is falling apart. But the reality is very different. The news reported that Oracle and OpenAI are scaling back expansion plans for the Abilene, Texas data center project. That headline sounds alarming, but the actual situation is more nuanced. Here’s what’s really happening: Meta Platforms is considering using the extra capacity in Abilene to operate its own data center. Meanwhile, the 4.5GW partnership between Oracle and OpenAI is still moving forward as planned, but the new data centers will likely be built outside Abilene. $VOO (Vanguard S&P 500 ETF) $SPX500 $QQQ (Invesco QQQ) In other words: Abilene capacity may go to Meta, while Oracle and OpenAI simply shift their expansion to another location. Interestingly, both pieces of information were released on the same day, but many media outlets chose the more dramatic angle for their headlines. Of course, no one can guarantee the partnership will last forever. But as of now, the Oracle–OpenAI expansion remains ongoing. $TSLA (Tesla Motors, Inc.) $AMD (Advanced Micro Devices Inc) $NVDA (NVIDIA Corporation) Investment Perspective Between Oracle and Advanced Micro Devices, I currently see higher certainty for AMD reaching $600. Why? Combined 12GW AI infrastructure demand from Meta and OpenAI Meta alone accounts for 6GW, and they clearly have the financial capacity to execute AMD has reportedly granted 10% equity incentives tied to the 12GW deployment and a $600 share price milestone OpenAI’s financial capacity is less certain, but Meta is very likely able to fund its side of the buildout. Even Meta’s 6GW alone could potentially support $AMD reaching $600 by the end of 2030, not to mention the additional 6GW from OpenAI. So from an investment standpoint: If $Oracle and AMD trade at similar valuations, I would prioritize AMD. If Oracle becomes significantly cheaper, then I would consider adding more ORCL.

Not investment advice. The author may have financial interests in the mentioned instruments.