The immediate catalyst, it seems, is an intensifying focus on capex, or capital expenditures. Microsoft revealed that its spending surged 66% to $37.5 billion in the latest quarter, even as growth in its Azure cloud business cooled slightly. Even more concerning to analysts, however, was a new disclosure that approximately 45% of the company’s $625 billion in remaining performance obligations (RPO)—a key measure of future cloud contracts—is tied directly to OpenAI, the company revealed after reporting earnings Wednesday afternoon. (Microsoft is both a major investor in and a provider of cloud-computing services to OpenAI.)
The real lesson here is that if you are a company that was founded on stupid imaginary bullshit your investors are comfortable with investing in stupid imaginary bullshit and it isn’t going to hurt your price.
When you are a legacy tech company whose investors expect you to actually make products that you sell for money, they don’t like to hear that blew every penny you had on fucking magic beans.
This would be like Big Oil investing in Enron, no?