"State of play: The tech giants that dominate the stock market are set to spend an estimated $700 billion on AI, but that money is going toward infrastructure, not application. They're paying up for data centers and chips - the guts that power AI before they have the applications that will make them money. If you draw a parallel to the 19th century railroad boom, they're building the rails before they have the trains on the tracks."
"Between the lines: If we pretend the top tech companies are a friend group, Oracle and CoreWeave, another data center company, were the ones taking on credit card debt to keep up with the spending habits of their richer peers, with a promise of a cash windfall from their new bestie, OpenAI. "Microsoft, Amazon, Google- that's who you want to be right now, because they're in charge," Gil Luria, an analyst at D.A. Davidson, tells Axios."
Oracle’s stock fell after Blue Owl Capital walked away from investment talks for a planned Michigan data center, citing concerns about potential delays and unfavorable lease and debt terms. Oracle told Bloomberg that investment discussions remained on schedule but did not involve Blue Owl. Investor and analyst commentary frames Blue Owl’s retreat as part of a broader repricing of risk in AI infrastructure. Tech giants plan roughly $700 billion in AI spending concentrated on data centers and chips rather than applications, effectively building infrastructure before end-user AI services. Oracle’s Michigan Stargate project linked to OpenAI faces possible timeline delays amid local approval scrutiny.
Read at Axios
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