In today’s world of artificial intelligence, major companies are joining forces on enormous projects, but investors are suddenly deciding that this is not the right path. That is exactly what is now happening around Sam Altman, the CEO of OpenAI, known for ChatGPT. His business partners, such as SoftBank Group Corp. and Oracle Corp., are going through difficult times on the stock market
SoftBank and Oracle Shares Plunge
Shares of SoftBank Group Corp., a Japanese technology company, have fallen 40% since the end of October. That is a massive decline. SoftBank is led by its chairman, Masayoshi Son, who is known for his bold investments. Similarly, shares of Oracle Corp., an established database software company, have lost all the gains they had made since the beginning of September. That was when Oracle announced a major $300 billion computing deal (approximately CZK 6.9 trillion) with OpenAI Inc. This deal gave Oracle a so-called "AI halo" – a kind of artificial intelligence sheen that attracted investors.
These three companies – SoftBank, Oracle, and OpenAI – are partners in a massive project called Stargate. It is a $500 billion artificial intelligence (AI) infrastructure project (approximately CZK 11.5 trillion). The goal is to build data centers across the United States. This project is intended to help OpenAI advance further in the field of AI. However, investors are now beginning to doubt OpenAI’s dominance in this race. Instead, they are turning to other players, which is hurting these partners in particular.
The Deal Between Son and Altman
In March, Masayoshi Son reached an agreement with Sam Altman on a risky investment. SoftBank pledged to invest $30 billion (approximately CZK 690 billion) in OpenAI by the end of the year. The deal was intended to strengthen their partnership, but now that investors are choosing sides in the AI race, it is backfiring on them. SoftBank and Oracle are paying the price for their close ties to Altman as the market looks elsewhere.
Source: bloomberg.com
