UAE capital props up US stocks? Not only injecting funds into OpenAI, but also pulling Oracle back from the edge of a debt cliff.

At the critical moment when the market is concerned about the bursting of the AI bubble, capital from the United Arab Emirates (UAE) may become the key force to reverse the situation. According to the Wall Street Journal, OpenAI is planning to raise up to $100 billion in funding, and is expected to seek investment from UAE sovereign wealth funds. Previously, OpenAI had already received investment from the UAE’s MGX investment company. The report points out that UAE sovereign wealth funds (such as MGX) are expected to become the core force in this round of financing. Market analysts believe that, given the huge amounts of money already invested, UAE capital choosing to continue injecting funds at this time, to some extent, reflects the “Too Big To Fail” logic—from financial institutions in 2008 extending to today’s AI industry leaders, capital must continue to flow in to maintain the system’s operation. For secondary market investors, the significance of this financing far exceeds OpenAI itself; it directly relates to the balance sheet health of key suppliers like Oracle. Previously, the market was widely concerned that OpenAI could not generate enough revenue to honor its massive computing infrastructure commitments to companies such as Oracle and CoreWeave. This concern led Barclays to downgrade Oracle’s debt rating; its credit default swap (CDS) price once soared to a 16-year high of about 156 basis points, and the market even began pricing in its bankruptcy risk over the next five years. This round of funding has a notable boosting effect on the industry chain. OpenAI’s raised funds will mainly be used to pay for computing power costs, which means data center service providers like Oracle will receive a continuous and stable source of income. Driven by this, Oracle’s stock price jumped more than 5% after hours on Thursday. OpenAI Seeks Government Guarantees OpenAI’s funding pressure started at the end of October this year. On October 31, during a podcast, OpenAI investor Brad Gerstner raised concerns: How can a company with only $13 billion in revenue afford $1.4 trillion in debt? Sam Altman did not directly respond. A few days later, reports emerged that OpenAI was seeking government guarantees to attract large-scale investment needed for AI computing and infrastructure. The implication is even more worrying: Without government guarantees, OpenAI simply cannot fulfill its $1.4 trillion investment commitments, which could mean the entire AI bubble is about to burst. Market skepticism about the AI industry’s financing capacity quickly spread to OpenAI’s partners. As analysts began tallying the trillions of dollars of debt needed for the AI cycle, companies with weaker credit ratings like CoreWeave and Oracle saw their bond and stock prices plunge, and the probability of bankruptcy within five years soared, driving their credit default swaps (CDS) to historical highs. Strategic Bets from Middle East Funds The deep involvement of UAE wealth funds is reshaping the industry landscape. According to the Wall Street Journal, given the enormous financing scale, OpenAI plans to bring in UAE sovereign wealth funds as major investors. Previously, OpenAI had already received support from the MGX fund under UAE AI and cloud computing company G42. Meanwhile, SoftBank CEO Masayoshi Son has promised to invest $30 billion in OpenAI this year, and last month sold $5.8 billion worth of Nvidia shares to allocate funds for this purpose. OpenAI expects to receive the remaining $22.5 billion from SoftBank’s current investment plan before the end of the year. However, faced with a total capital demand of up to $1.4 trillion over the next five years, the current level of financing remains inadequate. The upcoming tens-of-billions-level investment is changing the competitive landscape. OpenAI plans to use this funding to support its development over the next two years and beyond, which not only greatly increases its chances of ultimately winning in the AI race, but also significantly increases the likelihood that key partners like Oracle and CoreWeave will avoid bankruptcy in the next few years. Risk Warning and Disclaimer The market has risks, and investments need to be made cautiously. This article does not constitute personal investment advice and has not taken into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. If you invest based on this article, you are responsible for the outcome.