Oracle(US:ORCL) Benzinga·2026-01-05 08:23Core Viewpoint - CNBC host Jim Cramer endorses a J.P. Morgan report indicating that physical and financial constraints, rather than a market crash, will limit tech giants' spending on artificial intelligence (AI) [1] Group 1: Physical Constraints - Cramer argues that fears of an AI bubble similar to the dot-com era lack nuance, with "electric power gating" being the main factor preventing overspending by hyperscalers [2] - The J.P. Morgan report highlights U.S. power generation constraints as a significant risk for the AI sector, with data centers expected to drive two-thirds of U.S. load growth while only adding 25 GW of reliable capacity in 2024 [3] - This scarcity of electricity acts as a hard cap on the speed at which companies can deploy new infrastructure, effectively limiting their capital expenditures [3] Group 2: Financial Constraints - Major players like OpenAI will face balance sheet constraints, with the J.P. Morgan report noting substantial financial commitments that may exceed current revenues [3] - OpenAI has committed to pay Oracle Corp. $60 billion per year for compute facilities that are not yet built, highlighting the financial strain [3] - OpenAI's commitments to corporate partners total $1.4 trillion, while its revenue primarily comes from subscription fees, making profitability a significant challenge [4] Group 3: Market Dynamics - Cramer suggests that tangible constraints on power and capital will slow AI spending, preventing the speculative behavior seen during the 2000 market bubble [4] - The J.P. Morgan report contrasts today's market with the dot-com bubble, noting that current high valuations are supported by high profit margins, with 42 AI-related companies contributing up to 75% of S&P 500 earnings growth since late 2022 [7] - A shift in financing is occurring, with companies like Meta Platforms and Oracle increasingly relying on debt markets for data center expansions, indicating a new discipline in capital management [8][9]