Jim Cramer raises concerns about tech’s ‘Lazy Susan’ deals

CNBC’s Jim Cramer expressed concern Wednesday about cyclical transactions among tech companies as Wall Street weighs the value of artificial intelligence bellwether OpenAI.

“These days, we hear all the time about what I call these ‘Lazy Susan’ agreements, except they’re celebrated as good news for both parties,” he said.

A “Lazy Susan” deal occurs when one company gives another money, and in return the recipient invests some of that money back into the other company, according to Cramer. He cited recent news that OpenAI is currently in talks. Amazon getting at least $10 billion from the online retailer. In return, ChatGPT would buy artificial intelligence chips from maker Amazon.

Cramer said he found the deal “interesting” and wondered whether it would make more sense for OpenAI to just buy the chips. He reasoned that companies were so eager to get involved in OpenAI that they were willing to invest money just to get it back. But Cramer emphasized that he is increasingly concerned about such moves.

Cramer said there are signs that some companies are starting to shy away from big tech investments, particularly as investors look to OpenAI’s massive spending commitments, including an agreement to buy $300 billion worth of AI infrastructure from OpenAI. Seer. A report published Wednesday stated: Blue Owl Capital The firm pulled $10 billion in data center financing from Oracle because it was concerned about the tech company’s expenses and rising debt.

Cramer praised Blue Owl Capital’s move, saying the firm exercised “discipline.” Tech stocks won’t recover until more hyperscalers demonstrate discipline and reduce AI spending, he continued.

“Until someone says no to these types of cyclical deals and actually calls them ‘Lazy Susan’ deals, it’s not safe to bet on these stocks yet.”

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Disclaimer CNBC Investment Club holds shares of Amazon.