RT Financelot (@FinanceLancelot)Sam Altman is either the worst CEO in history or he's lying through his teeth. Let me explain...Last month he said Stargate will consume 40% of global DRAM supply. Since then prices have rocketed 3x out of shortage fearsHe hasn't secured funding, supply & it now costs 3x more https://t.co/8UQFWpfdAK ...

Financial Data and Key Metrics Changes - The company reported revenue of $2.3 billion for Q1 FY 2026, representing a sequential increase of 21% and a year-over-year increase of 23% [4][12] - Non-GAAP earnings per share (EPS) were $1.22, up from $0.29 in the prior quarter, exceeding guidance of $0.70-$0.90 [15][22] - Non-GAAP gross margin for Q1 was 29.9%, up 350 basis points sequentially, compared to guidance of 28.5%-29.5% [15][12] - Adjusted free cash flow generated was $448 million, with a free cash flow margin of 19.4% [16][17] Business Line Data and Key Metrics Changes - Data Center Business revenue increased by 26% sequentially, reaching $269 million [14][7] - Edge revenue was $1,387 million, up 26% sequentially, driven by a PC refresh cycle and smartphone demand [14][8] - Consumer revenue was $652 million, up 11% quarter-over-quarter, supported by strong partnerships and product launches [14][10] Market Data and Key Metrics Changes - The company anticipates ongoing demand for NAND products to exceed supply through the end of calendar year 2026 and beyond [4][18] - Investments in data centers and AI infrastructure are expected to surpass $1 trillion by 2030, driving demand for high-capacity SSDs [6][10] - The average smartphone capacity per device is expected to grow in the high-single digits in calendar years 2025 and 2026 [8][10] Company Strategy and Development Direction - The company is focused on growing revenue, expanding margins, and generating sustainable free cash flow to create shareholder value [4][22] - Strategic allocation decisions are being made to maximize long-term value creation, with an emphasis on advancing the Technology Roadmap and strengthening customer partnerships [5][6] - The company aims to maintain a net cash position and continue investing in the business while returning cash to shareholders [19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to create significant and sustainable value for customers and shareholders amidst robust demand [22][10] - The company is optimistic about the growth opportunities in the Data Center Business, with ongoing qualifications and strategic engagements with key hyperscale customers [22][7] - Management noted that the demand for products is expected to exceed supply beyond 2026, indicating a strong market outlook [18][19] Other Important Information - The company incurred $61 million in startup costs and $11 million in underutilization charges during the quarter [15][16] - The company plans to align its end market nomenclature to match industry standards, referring to data center, edge, and consumer segments [12][13] Q&A Session Summary Question: Are you seeing similar trends in NAND as in the HD world regarding customer engagement? - Management noted that customers are seeking long-term commitments and visibility into supply, indicating a shift from quarter-by-quarter deals to multi-quarter agreements [25][26] Question: How do you view the supply situation over the next couple of years? - Management indicated that the market is expected to remain undersupplied through 2026, with a focus on long-term demand trends [35][36] Question: What is the update on enterprise SSD qualifications and market share ambitions? - Management expressed satisfaction with the progress in enterprise SSD qualifications and anticipates increasing sales in this segment throughout FY 2026 [37][38] Question: How do you assess the enterprise SSD market opportunity relative to hard disk drives? - Management believes that both technologies will grow, with enterprise SSDs expected to grow faster due to increasing data storage needs [44][45] Question: Can you clarify the guidance for the upcoming quarter? - Management expects revenue growth to be driven primarily by pricing, with low-single-digit bid growth anticipated [92][93]

Core Insights - OpenAI, Oracle, and Related Digital are collaborating to build a large-scale data center campus in Saline Township, Michigan, aimed at enhancing Stargate capacity across the US [1][2] - The project is part of a multi-billion dollar commitment to provide 4.5GW of additional Stargate infrastructure for AI workloads [2] - The campus will feature a closed-loop cooling system to manage water usage efficiently, aligning it with standard office facilities [2] Project Details - The proposed campus will span 250 acres and consist of three single-storey buildings, each covering 550,000 square feet [2] - Power will be supplied by DTE Energy, supplemented by a new battery storage system financed by the project [3] - The project is expected to create over 2,500 union construction jobs during its construction phase [3] Economic Impact - Once operational, the project is projected to generate over 450 onsite roles through Related Digital and Oracle, along with 1,500 positions in Washtenaw County for ancillary operations [4] - The development is anticipated to create thousands of indirect jobs throughout Michigan and nationwide [5] - The project aims to strengthen domestic supply chains and enhance economic opportunities related to AI [6] Environmental Considerations - The campus, referred to as 'The Barn', will maintain a historic red barn at its entrance and aims for LEED certification [5] - The build plan includes minimum setbacks of 75 feet from the road and visual screening features [5] Construction Management - Walbridge, a Detroit-based construction firm with over a century of experience, has been appointed as the general contractor for the project [5]

Core Viewpoint - Oracle has positioned itself as a significant player in the AI sector through its partnership with OpenAI and the development of a new data center campus in Wisconsin, despite entering the AI space later than some competitors [1][2]. Investment and Infrastructure - The new data center campus will consist of four facilities with a power capacity nearing 1 GW, as part of a broader investment of up to 4.5 GW in Stargate capacity by Oracle and OpenAI [2]. - Construction of the campus is set to begin soon, with completion expected by 2028 [2]. Financial Analysis - Bank of America analysts have identified Oracle as the fourth AI infrastructure hyperscaler, indicating a significant transition for the company [3]. - A bottom-up financial model was created to assess the potential returns from Oracle's AI investments, yielding an initial project-level return of 9%, which could expand to 16% upon contract renewal [4][5]. - Oracle's financing strategy, primarily utilizing low-cost debt, is seen as a way to mitigate execution risks associated with these projects [5]. Contract Structure - Oracle is structuring its AI compute contracts as non-cancelable, non-modifiable, take-or-pay agreements, which are expected to provide stable cash flows and cost visibility [6]. - This approach is contrasted with other hyperscalers that are engaging in more speculative capacity building [6]. Market Outlook - Analysts have reiterated a buy rating for Oracle, setting a price target of $368, based on an estimated enterprise value-to-sales ratio of 12.4x for 2027, which is a premium compared to the large-cap software group [7].

Core Insights - The planned $15 billion campus in Port Washington, Wisconsin, is part of a collaboration between OpenAI and Oracle to enhance Stargate capacity by up to 4.5 gigawatts [1] Company and Industry Summary - OpenAI and Oracle are investing in a significant infrastructure project with a budget of $15 billion [1] - The project aims to deliver an additional 4.5 gigawatts of Stargate capacity, indicating a focus on expanding energy resources [1]

Core Insights - OpenAI is positioning itself at the forefront of the AI arms race with ambitious infrastructure plans and significant financial commitments from partners like Nvidia, Oracle, and SoftBank [2][3][5] Group 1: Financial Commitments and Partnerships - Nvidia plans to invest up to $100 billion to support OpenAI's data center capacity expansion [3] - OpenAI has expanded its deal with Oracle and SoftBank to a $400 billion commitment for its "Stargate" project [3][17] - Current projections indicate OpenAI could generate $125 billion in revenue by 2029 [7] Group 2: Infrastructure and Energy Requirements - OpenAI's infrastructure buildout will require 17 gigawatts of capacity, equivalent to about 17 nuclear power plants [9] - The company is facing challenges related to energy supply and grid capacity, with existing infrastructure already strained [9][28] - Altman emphasizes the need for significant energy resources, advocating for more nuclear power plants to meet demand [10] Group 3: Market Demand and Growth - OpenAI's usage of ChatGPT has surged tenfold over the past 18 months, particularly in enterprise applications [22] - There is a growing recognition among CEOs that advanced AI is critical for future business success, with Accenture reporting significant client bookings [23] - Databricks CEO notes that future AI usage will exceed current levels, indicating a need for increased infrastructure capacity [25] Group 4: Execution Risks and Financial Strategy - OpenAI is burning billions in cash and is reliant on external capital for growth, raising concerns about its financing strategy [5][17] - The company plans to take on debt to fund its infrastructure buildout, as equity financing is considered expensive [18] - OpenAI is exploring alternative monetization strategies, including affiliate-style fees, to address its financial challenges [21]

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Group 1 - OpenAI's "Stargate" infrastructure project is now envisioned as a $500 billion investment in AI infrastructure, expanding beyond initial plans to include various AI chip and data center initiatives [1][2] - The project aims to address the significant demand for AI tools and is seen as essential for the AI revolution, with OpenAI's CEO emphasizing the need for robust data center capabilities [3][4] - OpenAI is exploring creative financing options to secure chips for the data centers, with a goal of building a gigawatt of new AI infrastructure weekly [3][4] Group 2 - The initial vision for Stargate faced delays due to negotiations and location decisions, but the expanded vision encompasses a broader range of projects [4] - OpenAI's executives, including CEO Sam Altman, acknowledge investor concerns about a potential bubble from rapid infrastructure development while maintaining an optimistic outlook on long-term growth [6]

Core Insights - OpenAI and Oracle have entered into a significant $300 billion deal to construct a massive data center in West Texas, which is currently under construction with 4,000 Oracle workers involved [1] - OpenAI is rebranding its infrastructure as "Stargate" and emphasizes the growing demand for compute power as the business expands, indicating confidence in future revenue generation [2] - OpenAI CFO Sarah Frier addressed concerns about potential market bubbles related to partnerships with Oracle, Broadcom, and Nvidia, asserting that the AI industry is still in its early stages, akin to the early years of Netscape [3] Group 1 - The $300 billion deal between OpenAI and Oracle involves a data center in West Texas powered by Nvidia's chips [1] - OpenAI is rebranding its infrastructure under the name "Stargate" to streamline its operations [2] - Frier highlighted the increasing demand for compute power and the company's capability to finance future growth [2] Group 2 - Concerns about market bubbles due to rising stock prices of Oracle, Broadcom, and Nvidia were addressed by Frier, who believes the AI era is just beginning [3] - OpenAI is considering new debt financing options to support its extensive infrastructure buildout [3]

Core Insights - Major American companies, including Microsoft and OpenAI, are committing over £31 billion ($42.3 billion) to technology infrastructure in the UK, coinciding with President Trump's visit [2][3] - The UK government is facilitating this investment by fast-tracking planning approvals for data centers and creating an AI Growth Zone to stimulate job creation [3][4] Company Investments - Microsoft plans to invest $30 billion over four years in AI infrastructure in the UK, marking its largest financial commitment to the country [6] - OpenAI is central to a $500 billion Stargate AI infrastructure project, with plans to utilize up to 31,000 Nvidia Blackwell semiconductors in the UK [5][6] - Nvidia is investing £11 billion in AI data centers in the UK, aiming to deploy 120,000 AI accelerator chips by 2026 [6] - CoreWeave is set to invest £1.5 billion in a renewable energy-powered data center in the UK, in addition to its existing £1 billion investment [6] - Salesforce is extending its investment in the UK by an additional $2 billion through 2030, building on a previous $4 billion commitment [6] - Alphabet Inc.'s Google plans to invest £5 billion over two years, including a new data center in Hertfordshire [6] - BlackRock is investing £500 million into data centers in the UK [6] Industry Trends - The UK is joining a global trend towards building local artificial intelligence infrastructure, referred to as sovereign AI, which is seen as crucial for future growth by companies like Nvidia [7][8] - Nvidia's CEO has indicated that the sovereign AI initiative could lead to up to $4 trillion in AI spending by the end of the decade [8]