Jimmy Cramer went straight at the AI spending war by saying Oracle could be the one company that forces the entire hyperscaler world to slow down.

He said Oracle’s role in the OpenAI partnership puts real pressure on how the AI build-out moves forward, and he argued that the company needs “discipline” before things spin out.He pointed to Oracle’s debt and said the bond market will eventually push the firm to step back.

“Oracle already has a huge amount of debt.Their balance sheet’s not that good.At some point, they’ll heed the warning of the bond market and slow things down.”

Jim also said the data center race is burning cash at a level that even strong operators struggle with. He warned that “Oracle can’t risk blowing up its balance sheet for Sam Altman,” and said that a slowdown is “when and how we’re going to get out of this morass.”

Jim said the biggest players driving this race are Amazon, Microsoft, Google, Meta and OpenAI with Oracle.He said they’re all trying to outspend each other by building data centers in every location they can secure.

He also said they’re doing this to keep rivals from touching their main businesses. He did not soften the point at all.He said this “reckless, imprudent data center spending” has knocked down valuations across the group.

Jim argued that OpenAI “is funded by venture capitalists and the company seems willing to spend itself to death,” and that the rest of the sector will keep matching that pace as long as the ChatGPT maker refuses to slow down.

Report tracks Oracle debt risk

Jim said OpenAI already committed more than $300 billion over five years on Oracle technology, and added that its other promises across the market sit near $1.4 trillion.He said this scale makes the entire space fragile.

He pointed to Oracle’s $18 billion bond sale and said the response was sharp because traders rushed into credit default swaps.He said these swaps show how real the fear is that Oracle could face pressure if spending continues at the current speed.

Jim said if Oracle holds back on spending, the rivals will feel safe enough to slow down too, and that could lift their stocks. He put it simply:

“This way Oracle stays alive, and OpenAI is forced to choose which businesses it truly wants to target. Because he who defends everything defends nothing.”

According to Jim, “institutional money and institutional memory fled the bubble stocks months ago and moved into all sorts of non-tech growth plays.”

He described this as the real strength of the market right now. He said that is why the pullback in the Mag Seven is not the disaster many expected. He said the rotation already happened before the latest shocks.

Market rotation drives new positioning

Jim said Wall Street’s fear of a new data center bubble is missing the point because the hype faded months earlier. He said investors already rotated into aerospace, retail and fintech, and he called these groups the “salvation of this market” as the speculative names came down.

He compared today’s setup to the dotcom crash but said this time is different because “there is now more money around and more money indexed to the S&P 500 than there was 25 years ago,” so the average investor didn’t get wiped out.

Jim then said this rotation makes him “more sanguine than most,” and said there is “a great deal of strength in the very stocks that tried to save us in 2000, but failed because there wasn’t enough capital around to rotate to them.”

Jim’s final point was that “it isn’t 2000. It’s what I call 2025, with an orderly migration back to old, sustainable growth that’s a beneficiary of AI, not a maker of it.”

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