OpenAI Chip Choices Complements Nvidia Google Investment

Oracle's ambitious push into artificial intelligence infrastructure is raising eyebrows on Wall Street, as the company plans to add another $38 billion to its already substantial $104 billion debt. This significant borrowing, intended to fund new AI systems, has caused investor concern, leading to drops in Oracle's bonds and stock. The software giant, led by Larry Ellison, is banking on future profits from contracts with AI startups like OpenAI, even as it currently spends more than it earns. This trend of tech companies borrowing heavily for both new investments and stock buybacks is not unique to Oracle, as noted by Lisa Shalett of Morgan Stanley Wealth Management. Meanwhile, OpenAI's strategic decisions are having ripple effects across the chip industry. Intel's stock recently fell by 6.1% after news emerged that OpenAI opted for other chip makers, specifically TSMC's advanced manufacturing, for its major AI hardware investments, bypassing Intel despite the U.S. government's view of Intel's chip-making importance. In contrast, the AI coding startup Cursor is experiencing rapid growth, nearly tripling its value to $29.3 billion after securing $2.3 billion in its latest funding round. This Series D round saw participation from new investor Coatue, existing investor Accel, and new investors Nvidia and Alphabet's Google. Cursor, which develops tools for automatic code generation, has already achieved $1 billion in yearly revenue and plans to invest the new funds into research. The demand for AI infrastructure is also fueling impressive growth for companies like Applied Digital, whose stock has soared 311% in 2025. The company, which builds and operates AI data centers, has secured a robust $16 billion revenue pipeline, including an $11 billion, 15-year lease with CoreWeave and a $5 billion, 15-year lease with another U.S.-based hyperscaler. Applied Materials Inc. also anticipates higher sales in the second half of 2026, driven by chip makers' plans for significant production increases, as the company provides equipment essential for manufacturing AI chips. The broader AI market continues to draw strong opinions. JPMorgan Chase analysts disagree with investor Michael Burry's bearish stance on the AI boom, where Burry, known for 'The Big Short,' recently bet against Nvidia and Palantir. JPMorgan predicts continued growth for AI infrastructure, estimating the global AI ecosystem needs about $650 billion in yearly revenue for a 10% return, with businesses driving value through productivity gains. However, Nvidia faces its own challenges, including worries over U.S. policies restricting AI chip exports, particularly to China, and SoftBank's sale of its $5.8 billion stake, which sparked fears of an AI bubble. Despite these concerns and recent insider trading showing 526 sales and no purchases in six months, analysts remain largely positive on Nvidia. Beyond core infrastructure, AI's impact is expanding into specialized markets. The market for AI-driven tools that assist in diagnosing rare diseases is projected to reach $4.6 billion by 2029, fueled by advancements in genomic sequencing, electronic health records, and telemedicine. Additionally, RBC Capital identifies numerous software firms as potential takeover targets due to AI disruption, noting a 78% jump in software mergers and acquisitions this year, with private equity firms actively seeking to rebuild undervalued companies for an AI-focused future.

Key Takeaways

• Oracle plans to add $38 billion to its existing $104 billion debt to fund new AI infrastructure, causing investor concern and drops in its bonds and stock.
• OpenAI chose other chip makers, specifically TSMC, over Intel for its major AI hardware investments, leading to a 6.1% fall in Intel's stock.
• AI coding startup Cursor nearly tripled its value to $29.3 billion after raising $2.3 billion, with Nvidia and Alphabet's Google participating as investors.
• Applied Digital's stock soared 311% in 2025 due to high demand for AI data centers, securing a $16 billion revenue pipeline from long-term leases.
• Applied Materials Inc. expects higher sales in the second half of 2026, driven by increased demand for equipment used to manufacture AI chips.
• JPMorgan Chase analysts predict continued growth for AI infrastructure, disagreeing with Michael Burry's bets against Nvidia and Palantir.
• Nvidia faces concerns over U.S. AI chip export restrictions and SoftBank's $5.8 billion stake sale, though analysts remain largely positive.
• The market for AI-driven tools for rare disease diagnosis is projected to reach $4.6 billion by 2029, driven by advancements in healthcare technology.
• RBC Capital identifies many software firms as potential AI takeover targets, with software mergers and acquisitions jumping 78% this year.
• Many big tech companies, including Oracle, are borrowing heavily to fund both stock buyback programs and new AI investments.

Oracle's AI spending raises investor worries

Oracle plans to add $38 billion to its already large debt to pay for new AI infrastructure. This news has made investors and analysts worried, causing Oracle's bonds to lose value. The company already has about $104 billion in debt and spends more than it earns. Many big tech companies are borrowing money to fund both stock buyback programs and new investments.

Oracle's $38 billion AI debt worries investors

Oracle's bonds recently dropped after reports that the company plans to borrow another $38 billion. This money will fund its artificial intelligence infrastructure, adding to its current $104 billion debt. Investors worry about this large investment, especially since Oracle spends more than it earns now. The company hopes for future profits from contracts with AI startups like OpenAI. Lisa Shalett from Morgan Stanley Wealth Management noted that many tech companies are borrowing to support both stock buybacks and new spending.

Oracle's AI spending concerns investors

Oracle's bonds have recently dropped due to investor concerns. The company plans to add another $38 billion to its debt to fund its artificial intelligence infrastructure. Oracle has already invested billions this year to build its cloud and AI systems. This new borrowing will add to its existing $104 billion debt.

Intel stock falls as OpenAI picks other chip makers

Intel stock fell by 6.1% after news broke that OpenAI will not use Intel for its big AI hardware investments. OpenAI decided to skip Intel for its new AI infrastructure projects. This is a major blow to Intel, which has put a lot of money into its AI technology. OpenAI prefers TSMC's advanced manufacturing, even though the U.S. government sees Intel's chip making as very important.

AI coding startup Cursor triples value to $29.3 billion

Code-generation startup Cursor nearly tripled its value to $29.3 billion after raising $2.3 billion in its latest funding round. New investor Coatue led the Series D round, with existing investor Accel and new investors Nvidia and Alphabet's Google also participating. The San Francisco-based company develops tools that automatically generate and complete code. Cursor has already reached $1 billion in yearly revenue and will use the new funds to invest in its research efforts.

Oracle stock falls due to big AI investment

Oracle's stock was hit hard during a recent tech sell-off on Wall Street. The company's large investment in artificial intelligence caused investor concern. This worry comes from Oracle's heavy borrowing and its reliance on contracts with OpenAI. Larry Ellison's software company experienced a bigger drop than its competitors.

Applied Digital stock soars 311 percent on AI data center demand

Applied Digital stock has soared an incredible 311% in 2025 because of the huge demand for AI data centers. The company builds and operates these centers for its clients. Applied Digital signed a new lease with CoreWeave for an extra 150 megawatts of data center capacity, bringing their total potential revenue from CoreWeave to $11 billion over 15 years. The company also secured a $5 billion 15-year lease with another U.S.-based hyperscaler. This gives Applied Digital a strong $16 billion revenue pipeline, pointing to significant future growth.

AI tools to boost rare disease diagnosis market to $4.6 billion

The market for AI-driven tools that help find rare disease patients is expected to grow significantly, reaching $4.6 billion by 2029. This growth is happening because of better genomic sequencing, more use of Electronic Health Records, and the rise of telemedicine. Artificial intelligence helps diagnose rare diseases faster, which leads to better patient outcomes and lower healthcare costs. Companies are investing heavily in research to improve their AI diagnostic solutions. Regulatory bodies also increasingly recognize AI's potential in healthcare.

Applied Materials expects higher sales from AI chip demand

Applied Materials Inc. expects higher sales in the second half of 2026. CEO Gary Dickerson stated that chip makers plan significant increases in production, which will drive demand for Applied Materials' equipment and services. The company creates the equipment used to manufacture chips that power artificial intelligence applications. Its stock has already climbed over 40% this year as investors believe in the continued growth of the AI market.

JPMorgan disagrees with Michael Burry on AI future

JPMorgan Chase analysts disagree with investor Michael Burry's negative view on the artificial intelligence boom. Burry, known for "The Big Short," recently bet against Nvidia and Palantir, suggesting AI stocks are overvalued. JPMorgan's report predicts continued growth for AI infrastructure, not a market bubble. They estimate the global AI ecosystem needs about $650 billion in yearly revenue for a 10% return, with businesses driving most of this value through productivity gains. JPMorgan sees AI as a transformative force, creating significant investment opportunities in data centers, chips, and software.

RBC Capital lists software firms likely for AI takeovers

RBC Capital believes many software companies are likely takeover targets because of artificial intelligence disruption. Software mergers and acquisitions have jumped 78% this year, with private equity deals more than doubling. These companies often have strong customer bases and cash flow but lack clear AI narratives. RBC analysts listed potential targets including Asana, Box, Confluent, Coursera, Dropbox, DocuSign, Elastic, Five9, Fastly, Gen Digital, and GitLab. Private equity firms are especially interested in these undervalued companies to rebuild them for an AI-focused future.

NVIDIA faces export policy worries and SoftBank stake sale

Discussions about NVIDIA stock focus on U.S. policies restricting AI chip exports, especially to China, which could hurt revenue. SoftBank's sale of its $5.8 billion stake in NVIDIA also sparked fears of an AI bubble. Many investors are watching closely for NVIDIA's Q3 earnings report on November 19. Insider trading shows 526 sales and no purchases in the last six months. However, analysts remain largely positive, with 28 firms issuing buy ratings and none issuing sell ratings.

Sources

• Oracle bonds sell off as AI investment fuels investor concerns
• Oracle bonds sell off as AI investment fuels investor concerns By Reuters
• Oracle bonds sell off as AI investment fuels investor concerns
• Intel (INTC) Stock Drops as OpenAI Excludes It from AI Investments
• Code-gen startup Cursor nearly triples its valuation in Coatue-led funding round
• Oracle hit hard in Wall Street’s tech sell-off over its huge AI bet
• This Little-Known AI Stock Is Up 311% in 2025, and History Says It Could Soar Again in 2026 (Hint: Not Palantir)
• AI-Driven Rare Disease Patient Finder Market Report 2025 - Digital Health and Telemedicine Propel AI Tools in Rare Disease Detection; Industry to Reach $4.6 Billion by 2029
• Applied Materials Forecasts Higher Sales in Second Half of 2026 on Surge in AI Demand
• JPMorgan Says Michael Burry Is Dead Wrong About AI
• RBC Capital says these software companies are the most likely to be acquired as AI eats the world
• NVIDIA Stock (NVDA) Opinions on AI Chip Export Policies and Stake Sale