Anthropic Secures Broadcom Order as OpenAI Gains Disney Investment

The U.S. stock market experienced significant shifts on December 12, 2025, as the Federal Reserve's interest rate cut redirected investments towards "value" stocks and interest-rate-sensitive sectors. Simultaneously, the S&P 500 index fell about 1% from its record high, trading around 6,822.86. This decline stemmed from growing investor apprehension about the profitability of the AI market, particularly after earnings reports from Oracle and Broadcom raised questions about returns on massive AI infrastructure spending. Rising Treasury yields further pressured expensive tech stocks, making technology the weakest sector that day. Broadcom, despite reporting robust financial results with Q4 revenue reaching $18.02 billion and a 74% surge in AI semiconductor revenue, saw its shares drop between 4.5% and 11%. CEO Hock Tan anticipates AI chip sales to double to $8.2 billion next quarter. However, investor concerns arose from CFO Kirsten Spears' warning about decreasing gross profit margins, attributed to a higher mix of lower-margin AI system sales within the company's substantial $73 billion backlog. Broadcom confirmed Anthropic as a major customer with a significant $21 billion order, yet analysts expressed worry about the company's reliance on a limited number of large clients. Oracle's stock also faced a downturn, falling 13% on December 12, 2025, as its spending and forecasts fueled doubts about quick returns on AI investments. This directly impacted Bloom Energy, whose stock dropped approximately 10% to $98.07, given their July 2025 partnership to integrate Bloom's fuel cell technology into Oracle Cloud Infrastructure data centers. Despite Oracle denying reports of data center delays, its surging debt levels and credit default swaps underscore the financial pressures in the AI infrastructure buildout. Major investments continue to flow into the AI sector, even amidst market jitters. Disney announced a $1 billion investment in OpenAI, aiming to enable users to create videos featuring Disney characters using OpenAI's Sora technology. This deal is among the largest AI investments of 2025. Furthermore, OpenAI is involved in a colossal $500 billion "Stargate" project alongside SoftBank and Oracle, and holds a separate $300 billion contract with Oracle, highlighting the immense capital being deployed in the AI arms race. Nvidia, a dominant force in the AI industry, continues to demonstrate strong growth, with demand for its AI data center business still outstripping supply. The company achieved a remarkable milestone in October, becoming the world's first $5 trillion company, underscoring its pivotal role in the global AI buildout. However, the broader market's "AI angst" regarding the profitability of extensive AI infrastructure spending also affects Nvidia, as investors scrutinize the long-term returns on these massive investments. The booming AI data center industry increasingly relies on debt financing, with deals jumping to $125 billion this year from $15 billion in 2024, according to a UBS report. This reliance raises financial stability concerns, prompting the Bank of England to warn about potential instability if AI valuations decline. Major tech players like Microsoft and Google (Alphabet) are also taking on more debt to fund their AI infrastructure expansions, reflecting the capital-intensive nature of this growth. In other developments, SoftBank, a prominent Japanese investor, is actively re-engaging with Indian artificial intelligence startups after a two-year investment hiatus, with managing partner Sumer Juneja confirming this renewed focus. Conversely, Fermi Inc. faced a setback when a tenant canceled a $150 million agreement for its planned AI campus in West Texas, causing its stock to plunge 43%. This incident adds to the growing worries about an AI infrastructure bubble and heightened competition within the sector. The cultural impact of AI is also evident, as "The Architects of AI," including figures like Elon Musk and Sam Altman, were collectively named Time Person of the Year for 2025. This decision, however, sparked frustration among online gamblers who had bet specifically on "AI" itself on prediction market websites like Kalshi, highlighting the increasing trend of betting on a wide range of events, including those in the rapidly evolving tech world. Experts predict global AI spending will reach $375 billion this year and exceed $3 trillion annually by 2030.

Key Takeaways

• On December 12, 2025, the S&P 500 dropped about 1% due to investor concerns over AI profitability, following updates from Broadcom and Oracle.
• Broadcom reported Q4 revenue of $18.02 billion and a 74% surge in AI semiconductor revenue, but its stock fell due to warnings of decreasing gross profit margins from lower-margin AI system sales in its $73 billion backlog.
• Anthropic is a major Broadcom customer, placing a $21 billion order for AI systems.
• Oracle's stock fell 13% amid doubts about quick returns on AI investments, impacting its partner Bloom Energy, whose stock dropped 10%.
• Disney invested $1 billion in OpenAI to enable video creation with Disney characters using Sora, one of several large AI deals in 2025.
• OpenAI, SoftBank, and Oracle are involved in a $500 billion "Stargate" project, with OpenAI also having a $300 billion contract with Oracle.
• Nvidia continues strong growth, becoming the world's first $5 trillion company in October, despite broader "AI angst" regarding infrastructure spending profitability.
• AI data center financing deals surged to $125 billion this year, heavily relying on debt, raising financial stability concerns from the Bank of England, with Microsoft and Google also taking on more debt.
• SoftBank is actively seeking new investments in Indian AI startups after a two-year hiatus.
• "The Architects of AI," including Sam Altman, were named Time Person of the Year for 2025, highlighting AI's growing prominence.

Investors Shift Focus as Fed Cuts Rates and AI Stocks Wobble

The U.S. stock market saw shifts on December 12, 2025, as the Federal Reserve cut interest rates. This move sent money into "value" stocks and areas sensitive to interest rates. Meanwhile, the AI trade faced challenges after Oracle and Broadcom's earnings raised questions about profitability. The S&P 500 hit a new record, but investors are now more selective, looking for strong cash flows and clear growth drivers. Upcoming jobs and CPI data next week could further influence market direction.

S&P 500 Falls as Broadcom and Oracle Shake AI Stocks

On December 12, 2025, the S&P 500 index dropped about 1% from its record high. This happened because investors worried about the AI market after Broadcom warned about profit margins and Oracle's stock fell. The S&P 500 traded around 6,822.86, down 78.14 points. Rising Treasury yields also put pressure on expensive tech stocks. Technology was the weakest sector, showing a shift as investors moved money out of AI-linked companies.

Bloom Energy Stock Falls Amid AI Infrastructure Concerns

Bloom Energy stock (NYSE: BE) dropped about 10% on December 12, 2025, trading around $98.07. This decline came as investors questioned the returns on AI infrastructure spending, following updates from Oracle and Broadcom. Bloom Energy's stock is especially sensitive to Oracle news because they partnered in July 2025 to use Bloom's fuel cell technology in Oracle Cloud Infrastructure data centers. Oracle's recent outlook and spending plans raised concerns, even though Oracle denied reports of data center delays. Bloom Energy aims to provide fast, onsite power for data centers, having deployed 1.5 GW globally.

Broadcom Shares Fall Despite Strong AI Sales Growth

Broadcom reported strong financial results, with Q4 revenue reaching $18.02 billion and AI semiconductor revenue surging 74%. CEO Hock Tan expects AI chip sales to double to $8.2 billion next quarter. However, the company's shares fell because its CFO, Kirsten Spears, warned that gross profit margins would decrease. This is due to a higher mix of lower-margin AI system sales in its $73 billion backlog. Broadcom also confirmed Anthropic as a major customer with a $21 billion order, but analysts worry about relying on only five large customers.

Broadcom Stock Drops Despite High AI Sales

Broadcom stock (AVGO) fell 4.5% despite reporting strong AI sales in its fiscal Q4. The company has a $73 billion backlog of AI orders for the next 18 months. However, investors worried about future profit margins because a large part of these orders are for lower-margin system sales, not just high-margin chips. Broadcom confirmed Anthropic as a key customer with a $10 billion order and also announced a fifth custom chip customer. Despite the stock drop, Broadcom's shares are still up over 71% this year, and the company raised its quarterly dividend by 10%.

SoftBank Eyes Indian AI Startups After Investment Hiatus

SoftBank, a major Japanese investor, is actively looking to invest in Indian artificial intelligence startups again. This comes after a two-year break from new investments in India. Sumer Juneja, a managing partner at SoftBank Investment Advisers, explained that investing has natural ups and downs. SoftBank has already seen success in India, with its portfolio companies Lenskart and Meesho recently going public, earning the firm a billion dollars.

Gamblers Upset After Losing Time Person of Year AI Bet

Online gamblers are angry after losing bets on "Time Person of the Year" for 2025. Time Magazine named "The Architects of AI" as the winners, including figures like Elon Musk and Sam Altman. However, many gamblers on the prediction market website Kalshi had bet specifically on "AI" itself. They argued that one of Time's magazine covers, which featured "AI" in large letters, supported their bet. This incident highlights the growing trend of betting on nearly everything through platforms like Kalshi.

Disney Invests $1 Billion in OpenAI for Video Generation

Disney announced a $1 billion investment in OpenAI, allowing users to create videos with Disney characters using Sora. This deal is one of the largest AI investments in 2025. Experts predict global AI spending will reach $375 billion this year and over $3 trillion annually by 2030. Other major AI deals include a $500 billion project called "Stargate" by OpenAI, SoftBank, and Oracle, and a $300 billion contract between OpenAI and Oracle. Despite these large investments, a Bank of America survey found that 53% of investors believe AI stocks are in a bubble.

Fermi Stock Plunges as AI Campus Deal Ends

Fermi Inc. stock dropped sharply by 43% on Friday after a tenant canceled a $150 million agreement. This deal was for Fermi's planned artificial intelligence campus in West Texas. No money had been used from the agreement, and Fermi is now talking with other potential electricity customers. The company, co-founded by Rick Perry, still plans to start delivering power in 2026. This setback comes amid growing worries about an AI infrastructure bubble and increased competition in the sector.

Broadcom Shares Drop 11% Despite Strong AI Earnings

Broadcom's shares fell 11% on Friday, marking its worst day since January, even after reporting strong earnings. The company saw a 74% increase in AI chip sales, reaching $18.02 billion, and expects AI chip sales to double this quarter to $8.2 billion. However, investors worried about lower profit margins due to higher costs for producing AI server racks. Broadcom also revealed a $73 billion backlog of AI orders, including $21 billion from Anthropic. This drop reflects broader "AI angst" affecting other companies like Oracle and Nvidia, as investors question the profitability of massive AI infrastructure spending.

AI Data Centers Rely Heavily on Debt Financing

The booming AI data center industry is increasingly relying on debt for funding, raising concerns about financial risks. A UBS report shows that AI data center financing deals jumped to $125 billion this year, up from $15 billion in 2024. The Bank of England warned that if AI valuations drop, this debt could create financial instability. Oracle's shares fell 13% after its spending and forecasts raised doubts about quick returns on AI investments. Oracle's debt levels and credit default swaps have surged, and major tech companies like Microsoft and Alphabet are also taking on more debt for AI infrastructure.

Nvidia Continues Strong Growth in AI Arms Race

Nvidia, a leader in the AI industry, continues to show strong growth despite some market volatility. Morningstar analyst Brian Colello notes that Nvidia has grown its data center business significantly, with demand for AI still outstripping supply. The company became the world's first $5 trillion company in October, demonstrating its success in the massive AI buildout. However, Colello cautions that the industry faces challenges like energy needs, supply chain expansion, and funding, especially as a few tech giants lead the spending. He remains optimistic about the AI industry's future, expecting continued growth into 2026 and beyond.

Sources

• Best Stocks to Buy Now in the U.S. Stock Market (Dec. 12, 2025): Top Picks as the Fed Cuts Rates and the AI Trade Wobbles
• S&P 500 Today (Dec. 12, 2025): Index Slides From Record High as Broadcom and Oracle Rattle the AI Trade
• Bloom Energy Stock (NYSE: BE) Slides as the AI Infrastructure Trade Wobbles — Latest News, Analyst Forecasts, and What’s Next (Dec. 12, 2025)
• Broadcom Reports Strong AI Revenue Surge but Shares Drop on Guidance Warning
• Broadcom Stock Sinks 4.5% Despite Posting Strong AI Sales in Fiscal Q4
• SoftBank is powering up again: “If you have a deal, we have the money”
• Online Gamblers Angry Over Losing Time Person Of The Year Bet
• Disney’s $1 Billion OpenAI Investment Makes 2025’s Top AI Deals (Full List, Ranked)
• Fermi Falls 51% After AI Campus Tenant Ends $150 Million Deal
• Broadcom tumbles 11% despite blockbuster earnings as 'AI angst' weighs on Oracle, Nvidia
• Five debt hotspots in the AI data centre boom By Reuters
• Why Betting Against Nvidia in the AI Arms Race Could Be a Mistake