Microsoft’s $440 billion wipeout, and investors angry about OpenAI’s debt, explained | Fortune
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Microsoft’s stock has plummeted 12% owing to a slight miss on revenue, showing how spooked investors are by the “spend now, profit later” AI market.

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.)

  • Optional@lemmy.worldEnglish
    29·
    14 hours ago

    OpenAI has made about $1.4 trillion in commitments to procure both the energy and compute it needs to fuel its operations. But its revenue barely crossed $20 billion in 2025.

    Investors are increasingly critical of what they describe as “circular” deals involving the industry’s biggest players. On Wednesday evening, The Information reported that OpenAI is seeking a fresh $60 billion in funding from heavyweights like Nvidia and Amazon. However, market reaction suggests that more capital isn’t going to be a viable substitute for a business model anymore. “Maybe Oracle stock got way ahead of fundamentals, and now the market’s saying, ‘All right, show me, I want to see it,’” Eric Diton, president of the Wealth Alliance, told**Yahoo Finance.

    • GarbadgeGoober@feddit.orgEnglish
      5·
      9 hours ago

      Thanks for sharing, really insightful.

      In my personal opinion after being also responsible in AI for our company, I do not see how it will be profitable for them.

      For example Microsoft Copilot license, costs 30$/month, but a lot of things I can do with it a free Chatbot can do too.

      It definitely has it strengths and use cases and I am sure it will not go away. But it is not the way the market it as a full AI, it just generates answers with the highest probability. I cannot see it developing from there to the real AI.

      I think this year will be really interesting to watch all the AI companies, especially Oracle as they have to refinance a lot. If one falls it will send them into to a spiral, the big companies will be fine, but I am sure they will cut their funding of OpenAI.

      But who knows could be the other way around and OpenAI finds anything new to make them more profitable.