France Telecom analyzes OpenAI's new expenditure plan: clear roadmap for computing power investment, benefiting Microsoft (MSFT.US) and Oracle (ORCL.US)

Bloomberg News has learned that the stock research department of BNP Paribas in France stated that OpenAI’s updated artificial intelligence (AI) infrastructure capital expenditure plan is a positive for hyperscale cloud service providers Microsoft (MSFT.US) and Oracle (ORCL.US).

According to reports, OpenAI plans to invest a total of $600 billion in computing power by 2030. OpenAI CEO Sam Altman previously stated in October last year that the company plans to spend up to $1.4 trillion on infrastructure by 2033.

BNP Paribas analyst Stefan Slowinski said in an investor report, “In our view, these revisions do not necessarily reflect that OpenAI has become more restrained. Instead, the updated forecasts are broadly consistent with the previously announced commitment of $1.4 trillion in infrastructure by 2033, with capital expenditures still clearly concentrated after 2030. Considering that OpenAI may plan to invest over $200 billion annually in computing power by 2030, our rough calculations suggest that the initial $1.4 trillion scale proposed by OpenAI could still be achievable.”

BNP Paribas believes that this update generally paints a positive outlook for OpenAI’s main supporters, Microsoft, and its key infrastructure partner, Oracle. Slowinski pointed out, “As the cash burn outlook becomes clearer and OpenAI’s over $100 billion in funding is nearing completion (with an additional approximately $80 billion possibly needed to reach free cash flow breakeven), we believe this reduces the short-term counterparty risk for Microsoft and Oracle. The revised revenue expectations for OpenAI (aiming for $280 billion by 2030, up from the previous $200 billion, mainly driven by enterprise business) also imply that if OpenAI can achieve its goals, Microsoft could earn an additional $12 billion in revenue sharing by the 2030 fiscal year (4% higher than market consensus). However, despite OpenAI’s plans to significantly increase its computing budget in the short term, it remains unclear whether Microsoft and Oracle will directly benefit from this additional spending, especially with Amazon (AMZN.US) reportedly participating in this round of financing.”