OpenAI should raise cash to get data center stocks on track

CNBC’s Jim Cramer on Friday explained how he thinks the data center industry can regain its place in the market, saying OpenAI needs to raise cash to pay Seeris one of its important partners.

“No matter what, OpenAI needs to raise a lot of money, and it needs to raise it now,” he said. “Otherwise the entire data center structure will collapse and just sit there.”

AI stocks managed to rebound on Friday with a tech-heavy rally Nasdaq Composite up 1.31% — the group has been under pressure in recent months as Wall Street scrutinizes hyperscalers’ big infrastructure spending.

Oracle and OpenAI in particular received backlash after the ChatGPT maker pledged to pay more than $300 billion to the software company. Cramer suggested that investors became concerned after Oracle raised $18 billion in a bond sale in September, one of the largest debt issues in the technology industry.

Cramer said OpenAI “needs to act while the iron is hot and try to raise $200 billion at a trillion-dollar valuation.” This funding will allow the company to pay Oracle the money it needs to build data centers, he continued. If that happens, other hyperscalers would have to continue spending on infrastructure and data center stocks could rise, he said.

Cramer said he’s pretty optimistic that OpenAI will be able to raise the money. But the team has a “monstrous arrogance,” he continued, suggesting that now could be a “humbling moment” for the company or “show that they were right to be arrogant.”

“Even if OpenAI raises, say, $100 billion in a private round now and then comes back with another $100 billion for a public round next year, the data center theme could continue to hum along,” he said. “Of course, if Open AI can’t raise enough money, then we’ll reverse everything we see today and go back.”

OpenAI and Oracle did not immediately respond to a request for comment.