'33%' surged, then suddenly... "461 trillion won gone" cries

Source

Korea Economic Daily

Summary

Reported that Oracle's stock turned bearish after a large-scale cloud computing contract with OpenAI, and that about KRW 461 trillion in market capitalization evaporated in the past two months.
It said that not only Oracle but also Broadcom and AWS, among other major companies that signed contracts with OpenAI, are showing downward stock trends.
It reported that concerns about the sustainability of AI-related vendor financing structures have grown, leading to analysis that OpenAI is at the center of declines in the stock prices of related companies.

Oracle lost KRW 461 trillion in market cap in two months

Concerns over vendor financing grow

Oracle's market cap evaporated at a scale comparable to U.S. GE

Broadcom and AWS also on a downward trend

OpenAI, which was nicknamed the 'Midas' touch' for boosting the stock price of every company it signed contracts with, has recently been blamed as a major cause of stock price declines as the AI bubble narrative spreads.

The Financial Times (FT) reported on the 18th (local time) that "it is still too early to discuss OpenAI's curse, but at the center of the AI circular economy there could be a 'reverse Midas' hand." The FT analyzed that as concerns grow that the 'vendor financing (VF)' structure — in which AI chip companies and hyperscalers (large-scale data center operators) invest in AI model developers and those developers use the funds to buy AI chips or computing resources — may not be sustainable, OpenAI at the center of this is depressing the stock prices of related companies.

Oracle was reported to have signed a five-year, $300 billion (about KRW 439 trillion) cloud computing contract with OpenAI on September 10, and its stock surged 33% in one day. However, after peaking at the end of September, Oracle's stock turned weak and fell nearly 10% from September 10, when the contract was reported, to the 18th of this month. The market capitalization that evaporated during that time amounted to about $315 billion, equivalent in size to General Electric (GE).

Currently, about 58% of Oracle's backlog is attributable to OpenAI, showing a high degree of dependence. This share is higher than that of early OpenAI investor Microsoft (MS·39%) or Amazon (16%). As a result, the market also views Oracle as an indicator that reflects sentiment toward the unlisted company OpenAI.

Other companies that signed contracts with OpenAI are also struggling in the stock market. Broadcom, which signed a contract on the 13th of last month to supply AI chips on a scale of 10 gigawatts (GW) to OpenAI, has seen its stock fall about 4% in the month after the contract. Amazon Web Services (AWS) signed a $38 billion AI data center supply contract with OpenAI on the 3rd, but has since been on a declining trend.

Silicon Valley = Correspondent Kim Inyeop inside@hankyung.com