Tech opened higher as the AI narrative is pushing up semiconductors. The pledges that OpenAI is making to suppliers for its buildout plans are stunning. The level of confidence that AI systems will be able to generate billions to pay for the massive cost to get them fully up and running is not wavering. The grand total of transactions OpenAI has entered into has topped a trillion dollars.
Warnings that we’re seeing a repeat of the Dot-Com bubble are heard regularly. The big difference is that this time, the players are huge companies with huge balance sheets and existing cash flow. If profitability takes longer than expected, a few of the hardware suppliers will suffer operating losses. Nevertheless, with the market so heavily weighted to companies that are all-in on the AI bet, any serious setbacks on the prospects of AI profitability will have a serious impact on market…
