Oracle, CoreWeave’s shares decline following a report highlighting concerns. Concerns about OpenAI’s growth
Oracle and CoreWeave shares declined in premarket trading on Tuesday following a report from the Wall Street Journal indicating that OpenAI has not met its targets for new users and revenue in recent months, which has sparked concerns regarding the growth prospects of the ChatGPT creator.
According to a report citing sources familiar with the situation, OpenAI CFO Sarah Friar raised concerns regarding the company’s capacity to fulfill future computing contracts if revenue growth does not accelerate sufficiently.
Oracle’s shares fell by 7.7%, reaching $159.80 prior to the market opening. The AI cloud company has reportedly finalized one of the largest cloud agreements with OpenAI, totaling $300 billion in computing power over a span of five years.
CoreWeave’s shares decreased by 7.4%, reaching a price of $104. The AI startup, supported by Nvidia, secured a $11.9 billion contract with OpenAI last month to deliver AI infrastructure.
Japan’s SoftBank Group (9984.T), a significant investor in OpenAI, saw a decline of nearly 10% in Tokyo trading, while Arm Holdings experienced a drop of 8.1%.
SoftBank had committed to a $22.5 billion funding initiative for OpenAI by the end of the year through various cash-raising strategies, which may involve utilizing its undrawn margin loans secured against its stake in Arm Holdings, sources informed Reuters in December.
