Who REALLY controls the future of AI?
The AI Buildout Is Being Driven By Companies Spending Money They Don't Have!
$NVIDIA(NVDA)$ $Oracle(ORCL)$ $Advanced Micro Devices(AMD)$ have all signed MASSIVE deals to spend money they don't have.
Let's go through who REALLY controls the future of AI.
Investing $100 billion in OpenAI...except NVIDIA doesn't have $100 billion.
NVIDIA currently has about $57 billion in cash and generates ~$72 billion in cash per year. Can get the $100B, but doesn't have it now!
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Oracle is the hottest name in AI, but it's building data centers with debt!
With relatively little cash flow to pay for capex, Oracle's bet is a risky one.
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3. $Advanced Micro Devices(AMD)$
Gave OpenAI $34 billion in stock to buy its GPUs. Funding purchases not with its balance sheet, but its market cap.
Everything is fine...
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Who could pay for these GPUs?
$Alphabet(GOOG)$ $Alphabet(GOOGL)$ $Microsoft(MSFT)$ $Meta Platforms, Inc.(META)$.
But they're funding the buildout with cash flow and have extra leftover if need be. They'll be there to pick up the pieces if/when this all goes belly up.
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