Oracle’s Quiet AI Crisis 😬

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ORACLE’S QUIET AI CRISIS 😬 

Oracle’s been flexing its new AI cloud muscles, but a peek under the hood shows the gains might not be quite as shiny as investors hoped.

According to internal documents seen by The Information, Oracle’s fast-growing cloud division is running on razor-thin profit margins. In some cases, the company’s making less per dollar of revenue than your local corner shop.

Here’s what’s happening

Oracle’s been renting out data center space packed with Nvidia GPUs to OpenAI and other AI developers. That’s the core of its new growth story — and the company’s stock jumped recently after saying it expects $381 billion in revenue from these AI rentals over the next five years.

But the numbers tell a different story. In the three months ending August, Oracle made about $900 million from Nvidia-powered servers but only pulled in $125 million in gross profit. That’s just 14 cents of profit for every $1 of sales.

Even more worrying: in some cases, Oracle’s losing money renting small batches of Nvidia’s latest chips.

The problem with GPUs

Running AI data centers isn’t cheap. Power, cooling, and depreciation on Nvidia’s high-end chips add up fast. Oracle’s thin margins include those direct costs, but add in other depreciation and the margins shrink by another 7 percentage points.

To stay competitive, Oracle’s also been offering major discounts to big clients like OpenAI and Meta. Great for landing deals, not so great for profit margins.

By comparison, Amazon Web Services runs a 33% operating profit margin, and Google Cloud sits at 17%. Oracle’s AI cloud? Closer to the low teens.

The customer problem

Almost all of Oracle’s recent mega-deals — roughly $317 billion worth — came from a single customer: OpenAI. Its top five AI clients make up about 80% of the business. That concentration means if just one big client pulls back, the whole operation takes a hit.

Plus, Oracle doesn’t even own most of its data centers. It leases them from companies like Crusoe, which means less control and thinner margins compared to AWS and Google, who build and own their facilities.

The kicker

Oracle’s transformation from database dinosaur to AI data center powerhouse is impressive. But the economics are brutal.

It’s making billions in AI revenue, yet the costs of staying in the race — buying new Nvidia chips, keeping servers running, and undercutting rivals on price — are eating away the profits. If these low-margin AI rentals eventually outweigh Oracle’s traditional software business, the company’s overall profitability could take a long-term hit.

TL;DR:

• Oracle’s AI cloud business is booming but with thin margins (around 14%).

• Heavy power costs, depreciation, and chip discounts are cutting into profits.

• Most AI cloud revenue comes from a few clients, mainly OpenAI.

• Unlike AWS or Google, Oracle leases its data centers, which further hurts margins.

• The company’s pivot to AI is bold — but it might not be very profitable.

1. Play the “Pick-and-Shovel” GPU Boom
Oracle’s weak margins show how expensive it is to run Nvidia hardware — but Nvidia still gets paid up front. That means demand for GPUs stays hot regardless of Oracle’s profit squeeze.
📌 Action: Accumulate Nvidia $NVDA ( ▼ 0.27% ) or key suppliers like TSMC $TSM ( ▼ 2.77% ) on dips. Focus on the sellers of AI infrastructure, not the renters.

2. Bet on Data Center Landlords
Oracle doesn’t own its data centers; it leases them. That means third-party providers are quietly cashing in as AI demand surges.
📌 Action: Research and invest in data center REITs like Digital Realty $DLR ( ▼ 1.03% ) or Equinix $EQIX ( ▼ 0.35% ) . They benefit from long-term lease deals with cloud companies chasing GPU capacity.

3. Target the Efficiency Enablers
Oracle’s biggest pain points are power consumption and server costs. Companies solving those problems are the next winners.
📌 Action: Look at firms in AI power management and cooling — like Vertiv $VRT ( ▼ 2.41% ) or Schneider Electric $SBGSY ( ▼ 2.44% ) — that profit from every new GPU installation while avoiding the margin squeeze.

TESLA’S SECRET PRICE CUT PLAN 🤫 

Tesla’s playing 4D chess while everyone else is still trying to figure out how to plug in the charger.

They just dropped a $39,990 version of the Model Y, something fans have been waiting on ever since the EV tax credit expired and wallets started feeling a little lighter.

Here’s what you get:

• 325 miles of range

• Top speed of 125 mph

• Rear-wheel drive setup

• And a price tag about 15% cheaper than the base version

Basically, it’s Tesla’s way of saying, “You still want a Y? Cool. Let’s make that easier.”

Wait, wasn’t there supposed to be a $25K Tesla?

Yeah, about that. Elon teased it for years, but it’s looking more like vaporware than a real car. Instead of going ultra-cheap, Tesla’s just trimming down existing models.

The Model 3 also got a haircut — now starting at $36,990 for the standard rear-wheel drive version.

But hold up, what about demand?

Tesla’s Q3 deliveries crushed expectations, but analysts aren’t exactly betting on that trend to continue. A lot of those sales were pulled forward because people wanted to grab that sweet EV tax credit before it disappeared.

So now? Expect a little cooldown.

And how did Wall Street react?

Tesla’s down over 4% as of writing, but it’s still up over 20% in the past six weeks. Investors might be catching their breath, not panicking.

TL;DR:

• Tesla launched a $39,990 Model Y and a $36,990 Model 3.

• Both are cheaper, both rear-wheel drive.

• The rumored $25K model? Nowhere in sight.

• Q3 deliveries were strong, but future quarters may slow.

• Stock dipped a bit, but the uptrend’s still solid.

1. Ride the EV Price War
Tesla’s price cuts are pressuring competitors to follow suit. Lower prices can squeeze margins across the EV sector.
📌 Action: Accumulate shares of battery suppliers like Albemarle $ALB ( ▼ 1.63% ) or Panasonic Holdings $PCRFY ( ▼ 3.03% ) that benefit from rising EV production volume regardless of carmaker price wars.

2. Bet on EV Infrastructure Growth
Cheaper Teslas mean more EVs on the road — which means bigger demand for charging networks and grid upgrades.
📌 Action: Build positions in charging plays like ChargePoint $CHPT ( ▼ 4.56% ) or Blink Charging $BLNK ( ▼ 5.2% ) while sentiment is still cool.

3. Play the Long-Term Tesla Loyalty Loop
Tesla’s price cuts aim to lock more drivers into its ecosystem (Superchargers, FSD, software upgrades).
📌 Action: Accumulate Tesla $TSLA ( ▼ 4.45% ) shares on pullbacks. Focus on long-term gains as the cheaper entry point expands Tesla’s user base and future recurring revenue.

BITCOIN’S SECRET WEAPON REVEALED 🚀 

Bitcoin just hit a new all-time high above $126K, then decided to take it easy. The world’s favorite digital rock pulled back about 2.1% to $122K, still flexing a 10% gain over the past month and nearly 30% year-to-date.

Ether wasn’t so lucky, dipping 4% to $4.49K. Most altcoins joined the pain parade too — Mantle down 8%, Ethena down 7.6%, Cronos down 7.1%, Avalanche down 7%, Uniswap down 6.6%, Story down 6.1%, and Dogecoin down 5.8%.

Basically, the entire crypto market caught a case of the “we-hit-new-highs-so-let’s-take-profits” flu.

Stocks weren’t immune either. The Nasdaq and friends also slipped as the U.S. government shutdown dragged into its seventh day. But as B2 Ventures’ Arthur Azizov put it, bitcoin’s surge came from real fuel: ETF inflows, a weaker dollar, and the market betting big on more rate cuts.

So, Tuesday’s dip looks less like a red flag and more like a post-party cooldown.

Meanwhile, the U.S. is Building a Bitcoin War Chest

Senator Cynthia Lummis took to X to remind everyone that the U.S. Strategic Bitcoin Reserve — yeah, that’s a real thing now — can start collecting BTC “anytime.”

The reserve was created by Trump back in March through an executive order. It’s funded by bitcoin seized in criminal and civil cases and, importantly, can’t be sold. The plan is for the Treasury and Commerce Departments to keep stacking sats without costing taxpayers a dime.

Lummis called it a “fabulous articulation” of why the Bitcoin Act makes sense, and the timing couldn’t be better — her post came right after bitcoin touched that shiny $125K record.

At this rate, America might become one of the biggest hodlers on Earth.

TL;DR:

• Bitcoin hit a new ATH above $126K, then cooled to $122K.

• Most altcoins followed it down, likely from profit-taking.

• Stocks dipped too as the U.S. government shutdown dragged on.

• Senator Lummis says the U.S. can start stacking BTC for its Strategic Bitcoin Reserve now.

• The reserve is funded by seized bitcoin — no taxpayer money needed.

1. Ride the Bitcoin Dip
Bitcoin just hit $126K before cooling to $122K — classic profit-taking after a record run. With ETF inflows and a weaker dollar still in play, this looks more like a pit stop than a crash.
📌 Action: Gradually scale into BTC or spot ETFs like $IBIT ( ▼ 3.03% ) or $FBTC ( ▼ 3.03% ) during the pullback. Set staggered buy levels between $120K–$118K to capture short-term rebounds.

2. Stack the Infrastructure Players
The U.S. Strategic Bitcoin Reserve means the government is officially in the “buy and hold” game. That’s long-term bullish for custody, mining, and infrastructure firms that help handle all that BTC.
📌 Action: Add or accumulate exposure to crypto infrastructure stocks like $COIN ( ▼ 2.67% )  (Coinbase), $MARA ( ▼ 1.56% )  (Marathon Digital), or $RIOT ( ▼ 0.42% )  (Riot Platforms) while sentiment cools.

3. Leverage the Digital Gold Narrative
A formal U.S. Bitcoin Reserve and government shutdown fears reinforce BTC’s role as a hedge against shaky institutions. That narrative strengthens when volatility hits traditional markets.
📌 Action: Hedge your fiat-heavy portfolio by increasing long-term positions in BTC or gold ETFs like $GLD ( ▲ 0.52% ) to balance against risk-off sentiment.

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