Ellison-Oracle’s digital-gpu picks & shovels vs. Musk’s smoke-&-mirrors magic show: Ellison’s wealth tracks market expectations of cash earned by running data centers, while Musk’s tracks market mechanics and the (probably vain) hopes of the eternally optimistic that they can front-run the Big Boys…
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Briefly: Larry Ellison’s wealth climb reflects a simple thesis: Oracle now sits downstream of the AI gold rush, supplying the infrastructure that wins whether OpenAI soars, muddles, or stalls. By contrast, Elon Musk’s recovery looks more like bubble-time positive-feedback trading attempted front-running market plumbing: call-buying, hedging, and a desire to float Tesla’s price up into November’s shareholder-and-board vorte moment. The result is a richest-man relay: capex-linked cash flows on one side, and internet-age speculative dynamics on the other.
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Elon Musk is out there trying to juice the stock price of Tesla so that Larry Ellison does not gain more steps on him in the “world’s richest man” race. And Larry Ellison gains a great many steps, as investors recognize that Oracle is NVIDIA’s downstream partner in selling digital picks and shovels to OpenAI, and hence is likely to do well over the next five years if OpenAI does well, well if OpenAI flames out, and well if OpenAI does middling:
Emma Burleigh: $34 billion was wiped from Larry Ellison’s net worth days after briefly becoming the world’s richest as ‘AI bubble’ fears grow <https://fortune.com/2025/09/18/larry-ellison-billionaires-list-34-billion-loss-oracle-stock-openai-deal-skepticism-elon-musk-tesla/>: ‘Elon Musk had steadily held his spot at the top of the billionaires list for nearly a year straight before Oracle co-founder Larry Ellison briefly knocked him from the throne last week. Following better-than-expected quarterly results from the $856 billion software company, Oracle’s shares skyrocketed by 36% on September 10.… The 81-year-old… currently owns more than 40% of Oracle… enjoyed a $101 billion surge in wealth overnight, to $393 billion…. But Ellison’s ranking as the world’s richest person was short-lived: His estimated net worth fell by $34 billion in the two days following….
J. Bradford DeLong…tells Fortune that the sharp downfall was triggered by “second thoughts” around Oracle’s cloud deal with OpenAI…. OpenAI had signed a contract with Oracle to purchase $300 billion in computing power over the next five years…. DeLong says… “Ellison’s surge is because [of] the market’s perception of Oracle,” shift[ing] the company from “being irrelevant, to it being a key participant in OpenAI’s forthcoming construction and operation of data centers.” But then came mounting concerns…. Oracle hasn’t proven itself as a top cloud provider, and OpenAI’s $12 billion annualized revenue pales in comparison to the $300 billion deal. Oracle is relying heavily on one customer who may not be able to afford or fully use what they’ve committed to…. DeLong says it raises the question of Oracle’s entanglement with OpenAI—how reliable the numbers are, what risks it entails, and how much of a game-changer the deal actually is.
But still, he notes that many are optimistic, and those who are intrigued can cash in on the opportunity…. “If you are optimistic about OpenAI—and lots of people are very optimistic—buying Oracle stock is the best path available to you to invest in something that will succeed if OpenAI succeeds, because it is now clear that if OpenAI does very well, Oracle will do well.”…
Musk enjoyed being catapulted back to the top of the Bloomberg Billionaires Index with a $35 billion gain between September 10 and 12. However, why he experienced the wealth surge is less clear than Ellison’s toppling. DeLong says that Musk’s company Tesla hasn’t been doing anything special as of late that would cause the stock to sell for more. Instead, it could be tied to Tesla’s annual shareholding meeting this November; investors are optimistic that Tesla’s CEO will “make some good news” for the company before this fall’s vote. “It seems more like ‘we can make money by frontrunning the Big Boys as they manipulate stock prices’ is driving Tesla’s short-run asset valuation here—an internet-driven phenomenon,” DeLong explains. “Options traders are buying out-of-the-money calls on Tesla out of a belief that Elon Musk wants its stock price high in November. Such positive-feedback automatic demand by hedgers produces runups like we have seen in Tesla, that endure for a while”…
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I had actually sent her more:
Ellison's surge is because the market's perception of Oracle, and thus of his large stake in it, suddenly shifted from it being irrelevant to its being a key participant in OpenAI's forthcoming construction and operation of data centers.
In this, Oracle profits maximally whether or not OpenAI becomes a dominant AI business-consumer tech company, or indeed whether or not anyone makes large profits or if competition keeps profits low.
The subsequent decline came from second thoughts about the magnitude of Oracle's involvement.
Still, if you are optimistic about OpenAI—and lots of people are very optimistic—buying Oracle stock is the best path available to you to invest in something that will succeed if OpenAI succeeds, because it it now clear that if OpenAI does very well, Oracle will do well.
Musk’s (much smaller) wealth surge makes much less sense in a rational world, and whether it “makes sense” in the irrational world we live in is a deep philosophical conundrum, even though there is a viewpoint
Musk is more of a puzzle: there has not been anything going on that would lead anyone rational to think Tesla stock should sell for more.
It seems more like “we can make money by frontrunning the Big Boys as they manipulate stock prices” is driving Tesla's short-run asset valuation here—an internet-driven phenomenon.
Options traders are buying out-of-the-money calls on Tesla out of a belief that Elon Musk wants its stock price high in November.
Options sellers then need to hedge their positions by buying stock in Tesla.
The higher the price of stock, the more options sellers need to buy: thus the demand-for-Tesla-stock curve slopes the wrong way—a higher price means more demand for shares rather than lower.
Such positive-feedback automatic demand by hedgers produces runups like we have seen in Tesla, that endure for a while.
But with no fundamental underlying cause: just a belief that Elon Musk will, over the next two months, try to make some good news for Tesla before the November vote.
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