The NeoClouds Crush Was Not Just About Earnings

How AI economics, proxies, and power collided

The collapse of NeoClouds became a very dark marker for the market not only because companies like IREN, Nebius, and others suddenly sold off, but also because even a giant like Oracle lost 46% of its market capitalization since its previous triumphant earnings report, when the stock reached $328. What is the reason for such a shift in the narrative, and who might benefit from it?

Why did the AI trade, which had never been questioned before, suddenly become toxic, and what conclusions can an investor draw from this? This is critically important for understanding how narratives and the struggle of different groups for influence in the market affect your portfolio, and why these narratives deserve so much attention.

If we take NeoClouds out of focus, the company that suffered the most in this story was Oracle. It all started with an article in The Information claiming that Oracle’s margins were under pressure due to the use of older NVIDIA chips. This was followed by reports suggesting that OpenAI might not be able to fulfill all of its commitments related to building data centers.

The Moment the Market Lost Its Tolerance for Error

Oracle’s tens of billions of dollars in debt led investment banks to question whether the company would be able to service its obligations if OpenAI failed to finance the data centers. The resulting doom and gloom meant that even a routine change of a financing partner caused the stock to drop by 5%, something that previously would not have attracted any attention.

I spent a long time thinking about who would benefit from leaking information about Oracle’s margins. At first, I thought this could be an attempt to secure discounts from NVIDIA. But then other reports began to surface suggesting that OpenAI itself might fail to meet its obligations to Oracle, even though compute capacity is exactly what is needed most right now. Sam Altman himself recently said that this is precisely what is constraining monetization.

OpenAI’s problems became the trigger for this entire situation. A routine delay in a CoreWeave data center construction, a company that the market widely views as a proxy for NVIDIA led to a collapse in the stock after earnings. After that, other NeoClouds lost their right to make mistakes, and everything they did suddenly started to be perceived through a negative lens.

Ordinary capital-raising rounds or debt placements began to be seen as signs of weakness, and deals with hyperscalers started to be questioned.

Zooming Out: When Markets Spill Into Politics

On the other hand, let’s zoom out. Then we can see the effect that doom and gloom has had on political life, and in that context some leaks begin to look less strange. That’s where the story stops being purely economic.