OpenAI's excessive spending has raised concerns, but Oracle Corporation (ORCL.US) CEO is supportive: Having nearly 1 billion users, massive AI expenses are not a problem.

Clay Magouyrk, CEO of Oracle Corporation (ORCL.US), believes that OpenAI can afford the cost of the large amount of cloud infrastructure services it consumes. Speaking at the "AI World" conference held at Oracle Corporation on Monday, Magouyrk stated, "Certainly, OpenAI can spend $60 billion on cloud resources for a year." In July of this year, OpenAI reached a five-year agreement with Oracle Corporation worth over $300 billion. OpenAI rents chips from NVIDIA Corporation (NVDA.US) to run models through Oracle Corporation's system, while also using systems from CoreWeave (CRWV.US), Alphabet Inc. Class C (GOOGL.US), and Microsoft Corporation (MSFT.US). Additionally, the company is designing a custom AI processor to be manufactured by Broadcom Inc. (AVGO.US). The high-value deals signed by OpenAI this year will significantly boost the computing power of this startup company. Earlier on Monday, Broadcom Inc. and OpenAI announced that they will jointly deploy OpenAI's new chips worth 10 GW. NVIDIA Corporation, the company that produces most AI chips, stated last month that it will invest up to $100 billion in OpenAI to support new infrastructure construction the goal is to reach at least 10 GW of processing power. Furthermore, just last week, OpenAI announced plans to deploy 6 GW of AMD processors in the coming years. With AI and cloud service companies announcing large projects every few days, people are often unsure of the sources of funding for these projects. These interconnected transactions have also heightened concerns about investment bubbles in the AI field, especially as many collaborative projects involve OpenAI, a rapidly growing but as yet unprofitable company. Magouyrk said, "Look at the rate of growth in their user numbers, which has now reached nearly 1 billion. It's truly incredible." As one of the two people selected last month to lead the software company, Magouyrk attended the event along with another Oracle Corporation CEO, Mike Sicilia. OpenAI announced last week that its flagship product "ChatGPT" chatbot has reached 800 million active users per week (the product was officially launched less than three years ago). In 2024, OpenAI is projected to record a net loss of $5 billion. Sicilia stated that Oracle Corporation has already begun integrating OpenAI's AI models into patient access platforms to view electronic health records. Oracle Corporation acquired electronic health record supplier Cerner for around $28 billion in 2022. Discussing OpenAI, Sicilia said, "I have seen the outcomes already, and I do believe that they will have a significant impact on various industries and businesses." Building infrastructure on such a scale requires a significant amount of new energy sources. Sicilia said, "I think it's more a matter of time than whether we have enough power." On Monday, Oracle Corporation's stock price rose by 5%. This year, the stock has risen by 84%, bringing Oracle Corporation's market value close to $900 billion.