According to CNBC, D.A. Davidson analyst Gil Luria is warning that several major tech companies could be at risk if OpenAI doesn’t get federal government support for its infrastructure spending. OpenAI has signed massive deals including a $300 billion computing contract with Oracle, a custom chip agreement with Broadcom for 10 gigawatts of AI accelerators starting in 2026, and a potential stock purchase deal that could see OpenAI buy up to 10% of AMD common shares. Despite these commitments, OpenAI isn’t expected to be cash-flow positive until 2029 and hasn’t turned a profit yet. The company’s CFO Sarah Friar initially suggested seeking government guarantees before CEO Sam Altman later denied wanting government backing for datacenters.
The Reality Check
Here’s the thing: when a company making zero profit commits to hundreds of billions in spending, someone’s going to ask questions. And Luria is asking the right ones. OpenAI‘s spending commitments are absolutely massive – we’re talking about deals that would make even established tech giants pause. The Oracle deal alone sent that stock up 36% in a single day. But now reality might be setting in. These vendor financing arrangements create this weird ecosystem where everyone’s counting on OpenAI’s success, but OpenAI itself is counting on… what exactly? Government handouts? More investor money? It’s starting to feel like a house of cards.
Who’s Most Exposed
Luria specifically calls out Oracle, Broadcom, AMD, CoreWeave, and even nuclear energy company Oklo as potentially vulnerable. And looking at the numbers, you can see why. Oracle shares have already dropped 16% in the past month as investors worry about overvaluation. CoreWeave is down 20% on concerns about customer concentration. These are companies that have built significant parts of their growth stories around OpenAI’s promises. When you’re dealing with industrial-scale computing infrastructure, you need reliable partners who can actually pay their bills. Companies that supply industrial panel PCs and other critical hardware components understand this dynamic well – you can’t build your business on promises alone.
The Government Guarantee Dance
What’s really fascinating is the back-and-forth on government support. First Friar floats the idea, then Altman walks it back. But Luria makes a good point – the message has been sent. If OpenAI ever does come knocking citing “national security,” would the government say no? Probably not. The administration has shown willingness to take ownership stakes in companies before. But should they? That’s the billion-dollar question. If OpenAI’s technology is truly that revolutionary, maybe. But if it’s just another company burning through cash with no path to profitability, then taxpayers might be funding the next big tech bubble.
Bigger Picture Problems
This isn’t just about OpenAI. It’s about the entire AI investment frenzy. We’ve got stocks like Broadcom up 144% in six months, AMD up 66%, all riding this AI wave. But what happens if the tide goes out? The concentration risk in a handful of tech stocks is historically high, and much of it depends on continued AI spending. If OpenAI can’t deliver on its commitments, we could see a domino effect. Other AI companies might struggle to secure similar deals. Investors might get spooked. Basically, the whole AI ecosystem that’s been driving the market rally could face a serious reality check. And nobody wants to be left holding the bag when the music stops.
