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AI bubble concerns, plus investors flock to gold and bitcoin as US dollar comes under pressure
Youtube· 2025-10-08 15:10
[Applause] Welcome to Yahoo Finance's flagship show, The Morning Brief. I'm Julie Hyman. Let's get to the three things you need to know today. First up, US stock futures rebounding this morning after the major averages closed in the red, halting seven consecutive days of gains for the S&P 500. But the gold rally, it continues to power higher. Spot gold hitting $4,000 an ounce for the first time ever. Billionaire investor Ray Dalio says he sees gold as more of a safe haven than the dollar. He compared its re ...
Doomsday or new dawn: what will Nvidia, OpenAI’s circular dealmaking bring
The Economic Times· 2025-10-08 13:36
Core Insights - The article discusses the significant investments and circular deals between Nvidia and OpenAI, raising concerns about the sustainability of the AI boom and potential risks of an AI bubble [12][10][6] Investment Activities - Nvidia has signed 50 deals by September 2023, compared to 52 in 2024, indicating a rapid pace of investment in AI infrastructure [9] - OpenAI has made substantial investments, including a $300 billion deal with Oracle for data centers and a $2 billion equity investment in Elon Musk's xAI as part of a $20 billion round [3][12] - CoreWeave, a neocloud company, has received investments from both Nvidia and OpenAI, with Nvidia holding a 7% stake and a $6.3 billion backstop deal for cloud services [4][12] Market Dynamics - The investments are seen as necessary to meet the surging demand for AI technology, with proponents arguing that they represent the new normal rather than a bubble [10][13] - Analysts express concerns that circular financing, where money circulates between companies, may artificially inflate valuations and create risks if demand drops or competition increases [6][11] Company Performance - OpenAI, valued at $500 billion, is yet to turn a profit while planning to invest trillions in AI infrastructure [8][13] - Nvidia, as the dominant player in AI chips, continues to invest heavily, with its deals propping up the valuations of involved parties [6][9] Future Outlook - Executives from both companies express confidence in the long-term viability of their investments, despite concerns about circular financing [10][13] - The potential for a drop in demand or competition from cheaper alternatives poses risks to the current AI investment landscape [11][12]
Boom or bust: AI insiders concerned about Nvidia, OpenAI’s circular dealmaking
The Economic Times· 2025-10-08 13:31
Core Insights - The article discusses the significant investments and deals between Nvidia and OpenAI, highlighting the potential for a circular financing model that may inflate valuations without creating actual value [9][4][5] - There are concerns about the sustainability of these investments, with analysts drawing parallels to the dotcom bubble, suggesting that a downturn in demand could have widespread implications for the capital markets and economy [9][8][5] Investment Activities - Nvidia has committed to investing $100 billion in OpenAI for 10 gigawatts of data center capacity over the next decade, which will utilize millions of Nvidia GPUs [3] - OpenAI has signed a $300 billion deal with Oracle to establish five data centers in the US, which will also incorporate Nvidia chips [3] - Nvidia's recent $2 billion equity investment in Elon Musk's xAI is part of a larger $20 billion funding round structured through a special purpose vehicle [3][9] Market Dynamics - Both Nvidia and OpenAI are leveraging the current demand for AI technology to enhance their valuations, with Nvidia signing 50 deals by September 2023 [6][10] - OpenAI, valued at $500 billion, is yet to turn a profit while planning substantial investments in AI infrastructure, relying on a mix of venture capital, debt, and partnerships [10][5] - The investments in AI infrastructure are characterized as the new normal to meet increasing user demand, according to industry leaders [10][7] Concerns and Criticism - Analysts express worries about the circular nature of the financing arrangements, which may not lead to genuine growth and could result in inflated valuations [5][9] - Historical comparisons are made to the late 1990s, where similar circular deals were prevalent, raising concerns about the current AI landscape [5][9] - There is a fear that a decline in demand or competition from cheaper alternatives could trigger a collapse in the AI market [8][10]
Dow Jones and Nasdaq set to open higher as FOMC minutes and 'AI bubble' in focus
Proactiveinvestors NA· 2025-10-08 12:52
8am: A slight rebound was on the cards for Wall Street equities on Wednesday, while the dollar rose close to a two month high and Federal Reserve meeting minutes took on newfound importance. Dow Jones futures were up 0.2%, while S&P 500 and Nasdaq 100 futures were slightly lagging, up around 0.1% The previous session saw sellers outnumber buyers, reversing a positive start that saw new intraday records set, as the negative momentum was set by the tech-heavy Nasdaq's 0.7% decline, while the S&P dropped 0.4% ...
Bubble or not, AI continues to draw billions in investments
Yahoo Finance· 2025-10-08 12:47
Core Insights - The current landscape of artificial intelligence (AI) is characterized by significant investments and speculation, leading to discussions about whether it is an AI bubble or boom [1][4][6]. Investment and Partnerships - OpenAI has entered a multiyear, multibillion-dollar agreement with AMD for next-generation GPUs, with the option to acquire up to 10% of AMD [2]. - Nvidia is investing $100 billion into OpenAI, which is also a key customer for Nvidia's products [2]. - Major tech companies like Amazon, Google, Meta, and Microsoft are also heavily investing in AI infrastructure, with Oracle committing $40 billion for Nvidia chips to support OpenAI's Project Stargate [3]. Market Valuations - Nvidia's market capitalization exceeds $4.5 trillion, while OpenAI is valued at $500 billion, surpassing SpaceX's valuation of $400 billion [6]. - Microsoft and Google's valuations have crossed the $3 trillion mark, with Microsoft approaching $4 trillion [7]. Market Sentiment and Future Outlook - Concerns about an AI bubble are rising as stock prices and corporate valuations soar, reminiscent of the dot-com bubble [4][6]. - Despite fears, some experts believe there is substantial long-term demand for AI technologies, suggesting that investments in AI infrastructure will yield returns over time [5][6]. - Jeff Bezos has expressed that while the current excitement may lead to funding both good and bad ideas, some investments will ultimately pay off [7][8].
Bubble or not, AI is continues to draw billions in investments
Yahoo Finance· 2025-10-08 12:47
Core Insights - The current landscape of artificial intelligence (AI) is characterized by significant investments and speculation, leading to discussions about whether it is an AI bubble or boom [1][4][6] Investment and Partnerships - OpenAI has entered a multiyear, multibillion-dollar agreement with AMD for next-generation GPUs, with the option to acquire up to 10% of AMD [2] - Nvidia is investing $100 billion into OpenAI, highlighting its role as a major customer [2] - Oracle is committing $40 billion to Nvidia chips to support OpenAI's Project Stargate [3] Market Valuations - Nvidia's market capitalization exceeds $4.5 trillion, while OpenAI is valued at $500 billion, surpassing SpaceX's valuation of $400 billion [6] - Microsoft and Google's valuations have also risen above $3 trillion, with Microsoft nearing $4 trillion [7] Expert Opinions - There is a belief in long-term demand for AI, despite concerns about overbuilding and a potential mismatch between supply and demand in the short term [5][6] - Jeff Bezos has expressed concerns about the possibility of an AI bubble, noting that while many investments may not pay off, some will eventually yield returns [7][8]
Nvidia to Invest in Musk's xAI
Youtube· 2025-10-08 05:13
Core Insights - Nvidia is actively involved in significant investment deals within the AI infrastructure space, indicating strong market interest and potential growth opportunities [1][2][3] - xAI has increased its fundraising target from $10 billion to $20 billion, reflecting heightened investor confidence and valuation adjustments [2][3] - Nvidia is reportedly considering an equity investment of up to $2 billion in xAI, further solidifying its role in the AI ecosystem [3][4] Investment Structure - The investment structure involves a Special Purpose Vehicle (SPV) that will facilitate the purchase of CPU processors, which will then be rented to xAI, showcasing a complex financial arrangement [5][6] - Out of the $20 billion raised by xAI, approximately $7.5 billion is expected to be equity, while the remainder will be financed through debt via the SPV [6][7] - This structure allows Wall Street investors to recoup their investments, highlighting the interconnectedness of the AI investment landscape [7] Market Dynamics - Nvidia's investments lead to a circular relationship where companies receiving funding subsequently purchase Nvidia chips, raising questions about the sustainability of this model [4][8] - The dominance of Nvidia in the AI chip market positions it as a central player in the ongoing discussions about potential AI market bubbles versus genuine returns on investment [9]
Dizzying deal delirium: How the AI bubble bursts
Yahoo Finance· 2025-10-07 20:53
While the commercial outlook for AI among business leaders was enthusiastic, there were significant pockets of concern, extending beyond safety fears, to question the frenzied paths of investment. Sure, 60% of CEOs polled didn’t believe that AI hype had led to overinvestment; however, the other 40% raised significant concerns about the direction of AI exuberance, believing a correction to be imminent.At our Yale Chief Executive Leadership Institute CEO Summit in June, we heard similar admonitions from over ...
Markets are probably in a bubble and that's okay, says Vista Equity's Ashley MacNeill
Youtube· 2025-10-07 19:52
Joining me now to discuss Ashley McNeel, Vista Equity Partners, head of equity capital markets. Welcome back. >> Thank you.>> It's such a good time to have you because there are so many different opinions about this whole AI bubble or not. Um you say that you remain quote responsibly bullish on the market. So what does that mean.Respon like friends don't let friends buy AI stocks at these levels. Like what is that. >> Yeah.No, it means being measured about your approach recognizing that yeah, we're probably ...
Markets are probably in a bubble and that's okay, says Vista Equity's Ashley MacNeill
CNBC Television· 2025-10-07 19:52
Joining me now to discuss Ashley McNeel, Vista Equity Partners, head of equity capital markets. Welcome back. >> Thank you.>> It's such a good time to have you because there are so many different opinions about this whole AI bubble or not. Um you say that you remain quote responsibly bullish on the market. So what does that mean.Respon like friends don't let friends buy AI stocks at these levels. Like what is that. >> Yeah.No, it means being measured about your approach recognizing that yeah, we're probably ...