Kamal Ghorui
Oracle has publicly defended its partnership with OpenAI after reports emerged that the company could slash up to 30,000 jobs to fund AI infrastructure spending. The software giant said the stalled Nvidia-OpenAI investment deal has “zero impact” on its financial relationship with Sam Altman’s company, adding that it remains “highly confident in OpenAI’s ability to raise funds and meet its commitments.““The NVIDIA-OpenAI deal has zero impact on our financial relationship with OpenAI. We remain highly confident in OpenAI’s ability to raise funds and meet its commitments,” Oracle posted on X through its official account.The clarification came after a bruising weekend for OpenAI’s partner network. Nvidia CEO Jensen Huang, speaking to reporters in Taipei following what local media dubbed the “trillion-dollar dinner,” said his company would still back OpenAI—just not to the tune of $100 billion. “No, no, nothing like that,” he said when pressed on the figure that had been circulating since September.
Oracle’s reassurance sends stock tumbling
Wall Street wasn’t reassured. Minutes after Oracle’s post went live, the stock started sliding. It closed down 2.79% at $160.06. Venture capitalist Alex Kolicich captured the mood on X: “This is literally bank-run language.”Rather than calming nerves, the statement reminded investors how deeply Oracle has bet on AI. The company has racked up $58 billion in debt over just two months—$38 billion for data centres in Texas and Wisconsin, another $20 billion for a New Mexico campus. Total debt now tops $100 billion. Since peaking in September 2025, Oracle’s market cap has been cut in half, wiping out roughly $463 billion.
TD Cowen flags potential layoffs of up to 30,000
Investment bank TD Cowen reported this week that Oracle is considering workforce reductions affecting 20,000 to 30,000 employees. The cuts would free up $8 to $10 billion in cash flow—funds the company badly needs to deliver on a $300 billion OpenAI contract that TD Cowen estimates will require $156 billion in capital spending and around 3 million GPUs.Lenders are getting nervous too. Several US banks have quietly stepped back from Oracle-linked data centre projects. TD Cowen noted that interest rate premiums on Oracle debt have roughly doubled since September, and some planned data centre leases have stalled after private operators failed to secure financing.
Nvidia confirms $100 billion OpenAI deal was never finalised
The Wall Street Journal first reported that Nvidia’s proposed $100 billion investment in OpenAI had hit a wall, with some inside the chip giant expressing doubts. Huang confirmed in Taiwan that the September agreement was non-binding and never closed. He has also privately criticised what he views as a lack of discipline in OpenAI’s business approach and voiced concern about rising competition from Google’s Gemini and Anthropic’s Claude, WSJ reported.Separately, Reuters reported that OpenAI has been shopping for alternatives to Nvidia’s inference chips since last year. The ChatGPT maker has held discussions with AMD, Cerebras, and Groq. Seven sources told Reuters that OpenAI is unhappy with how quickly Nvidia’s hardware handles certain workloads, particularly around coding tasks.
Circular financing model faces mounting scepticism
The turbulence has put a spotlight on the circular economics underpinning the AI boom. Nvidia invests in companies that spend the money buying Nvidia chips. Oracle builds data centres for OpenAI, then charges OpenAI to use them. It all works until one party slows down—and suddenly everyone feels it.Sam Altman pushed back on the coverage with his own X post: “We love working with NVIDIA and they make the best AI chips in the world. We hope to be a gigantic customer for a very long time. I don’t get where all this insanity is coming from.”But the numbers remain daunting. OpenAI has committed to roughly $1.4 trillion in compute, power, and infrastructure spending while generating just over $20 billion in annualised revenue. The plan hinges on continuous fundraising at rising valuations. Amazon is reportedly in talks to invest up to $50 billion in the current round; SoftBank has already contributed $22.5 billion.Oracle, meanwhile, is asking new customers to pay up to 40% of contract value upfront and is said to be weighing a sale of Cerner, the healthcare software unit it bought for $28.3 billion in 2022. The company has not commented on the layoff reports.
