Oracle, AMD, and other AI-driven names sink, with Big Tech earnings on deck
Investors sold off stock of companies tied to OpenAI (OPAI.PVT) after the Wall Street Journal reported the AI developer recently missed sales and user targets, renewing concerns about overspending in the sector.
Citing people familiar with the matter, the report said the startup fell short of its internal goal of 1 billion weekly active users for OpenAI’s ChatGPT by year-end. It also reportedly missed its annual revenue target for the product.
Oracle and CoreWeave led the losses, down about 4% and 5%, respectively.
The news comes ahead of Microsoft’s Q1 update this week, along with results from four other “Magnificent Seven” Big Tech companies — Meta (META), Amazon (AMZN), Alphabet (GOOG, GOOGL), and Apple (AAPL). The quarterly results mark the first true test of investor appetite for the tech sector and its massive AI spending since the war in Iran began.
Also raising the stakes are recent moves by these companies: Meta has announced it will lay off 10% of its workforce, or about 8,000 roles; Microsoft said it will offer certain US employees voluntary buyouts; and Apple’s leadership is undergoing a transformation after CEO Tim Cook announced he will step down on Sept. 1 and be replaced by senior vice president of hardware John Ternus.
Tech companies are increasingly looking for ways to save cash, as they spend billions constructing data centers and developing AI models.
LIVE 6 updates
-
-
-
Elon Musk and OpenAI battle goes to trial
The years-long legal battle between Elon Musk and OpenAI (OPAI.PVT) finally goes to court on Monday.
Jury selection in the lawsuit kicks off Monday in the US District Court for the Northern District of California, with opening arguments expected to begin Tuesday.
Tesla Motors CEO Elon Musk, Y Combinator president Sam Altman, and The New York Times Financial Columnist Andrew Ross Sorkin speak onstage at Yerba Buena Center for the Arts on Oct. 6, 2015, in San Francisco, Calif. (Mike Windle/Getty Images for Vanity Fair) · Mike Windle via Getty Images The witness list for both sides is a who’s who of tech heavyweights, including Musk, OpenAI CEO Sam Altman, and Microsoft CEO Satya Nadella. Depending on how the plaintiffs decide, Musk could take the witness stand as early as Tuesday.
The outcome of the case could have a significant impact on the AI industry and, if it goes Musk’s way, could derail OpenAI’s future IPO plans.
In his suit, Musk accuses Altman, OpenAI president Greg Brockman, and others of misleading him about the company’s plans to transition from a nonprofit to a for-profit business. Microsoft (MSFT), which has invested billions in OpenAI, is also named as a defendant in the case.
-
OpenAI and Microsoft amend deal
Microsoft (MSFT) on Monday announced an amended long-term agreement with OpenAI (OPAI.PVT) that will see the company no longer have exclusive access to the AI startup’s intellectual property and AI models, while also altering its revenue-sharing deal with OpenAI.
The news comes ahead of Microsoft’s earnings report on Wednesday, and just six months after the two companies formalized an agreement that allowed OpenAI to transform into a for-profit business.
Microsoft CEO Satya Nadella speaks with OpenAI CEO Sam Altman in Seattle, Washington, on May 19, 2025. (Jason Redmond / AFP via Getty Images) · JASON REDMOND via Getty Images Under the terms of that deal, Microsoft was given exclusive access to OpenAI’s IP and models until the company achieved artificial general intelligence (AGI), or AI that’s as smart or smarter than humans. The new agreement, however, eliminates that clause, allowing OpenAI to provide its models to Microsoft’s competitors.
Microsoft’s Azure will continue to serve as OpenAI’s primary cloud platform and get access to its latest products first, but the new agreement means OpenAI can now offer all of its services through competing cloud providers, such as Amazon Web Services.
-
-
