CNBC’s Jim Cramer on Friday explained his belief that the data center sector can regain a foothold in the market, saying OpenAI needs to raise cash to pay the bills. oracleone of its key partners.
“No matter what, OpenAI needs to raise a lot of money, and it needs to do so now,” he said. “Otherwise, the entire data center will go down and stay down.”
Artificial intelligence stocks managed to rise on Friday, but were dominated by tech stocks. Nasdaq Composite Up 1.31% — The group has been under pressure in recent months as Wall Street has scrutinized the hyperscalers’ massive infrastructure spending.
Oracle and OpenAI in particular have raised eyebrows as the ChatGPT maker has promised to pay software companies more than $300 billion. Cramer suggested investors were growing concerned after Oracle raised $18 billion in a bond sale in September. This is one of the largest corporate bond issuances in history in the tech industry.
OpenAI should “strike while the iron is hot and aim to raise $200 billion at a $1 trillion valuation,” Cramer said. This funding will allow the company to pay Oracle the current funding needed to build the data center, he continued. If that happens, other hyperscalers will have to continue investing in infrastructure, which could push data center stocks higher, he said.
Kramer said he is fairly optimistic that OpenAI will be able to raise funding. But there is a “monstrous arrogance” in the company, he continued, suggesting this could be a “humbling moment” for the company or “showing that it’s right to be arrogant.”
“Even if OpenAI were to raise, say, $100 billion in a private round and return to another $100 billion public round next year, the data center theme could continue to resonate,” he said. “Of course, if Open AI doesn’t get enough funding, we’ll reverse everything we saw today and go back.”
OpenAI and Oracle did not respond to requests for comment.
