Ten-thousand-word analysis: Stargate is killing Oracle

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CryptoNews, tech commentator Ed Zitron published a long article titled “How OpenAI Killed Oracle,” analyzing Oracle’s financial predicament within Stargate. He noted that the Stargate data centers were built for a single tenant, OpenAI, and are expected to incur losses of more than $167 billion by the end of 2028, while OpenAI also owes $430 billion in compute-service bills to Amazon, Microsoft, and others in total. Zitron proposed that Stargate LLC has not been officially set up, SoftBank and OpenAI have not injected funds, and all construction expenses are being borne by Oracle and its financial partners. In addition, Oracle moved more than $100 billion of debt off its balance sheet through project financing, meaning its effective leverage is higher than what its financial statements show. Even if OpenAI pays on schedule, Nvidia’s chip refresh cycle will render the data center’s GPUs obsolete before Oracle has repaid its loans. Zitron also mentioned that Oracle founder Ellison borrowed $20 billion secured by shares worth more than $60 billion, and that if OpenAI defaults, it could trigger a chain reaction.

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