Yesterday I appeared on Yahoo Finance, where anchor Julie Hyman and I discussed the new AI chip export rules being considered by the U.S. government. We also talked about Oracle’s upcoming earnings report. Click the link below to view a (significantly shortened) video of our conversation, or read the rest of this post for an AI-generated, human-curated overview and summary of the entire discussion.
Link to edited segment.
Overview
The U.S. is considering new AI chip export rules that could require foreign nations to invest in U.S. AI datacenters, adding to global supply chain strains. Patrick Moorhead, Moor Insights & Strategy founder, noted that these export controls, which would require special licenses for the entire supply chain, are likely to create more uncertainty in the market — but not necessarily slow down exports. Moorhead also discussed Oracle’s upcoming earnings report, emphasizing the importance of growth in its cloud business, with remaining performance obligations (RPO) as a key metric to watch. He highlighted the message from Oracle’s last investor day, where the company outlined its capital commitment strategy to address investor concerns about funding and ROI.
Outline
U.S. AI Chip Export Proposal and Possible Global Supply Chain Impacts
- Julie Hyman introduces the topic of new U.S. rules under consideration for AI chip exports, which could require foreign nations to invest in U.S. AI datacenters.
- Patrick Moorhead discusses the additional risk these export rules add to an already strained global supply chain, also highlighting the impacts of sustained demand, volatile oil prices, and previous revisions of chip export controls.
- Moorhead explains the complexity of the export process, which requires special licenses for every entity in the supply chain, from TSMC to final assemblers.
- Hyman wonders whether the proposal is a negotiating tactic, noting a potential meeting between China and the U.S. at the end of the month.
- Moorhead suggests that the proposal is part of industrial policy disguised as security, through which the U.S. aims to leverage chip access to co-fund datacenters.
Potential Impact on Pricing and Market Uncertainty
- Hyman inquires about the potential impact on pricing of the proposed export rules and the ongoing oil crisis.
- Moorhead clarifies that the proposed rules are not tariffs but export controls, which could create uncertainty but not necessarily increase prices unless tariffs are applied.
- He explains the intricacies of the chip supply chain, including the movement of wafers from creation to final assembly, and how different agreements like USMCA play a role.
- Moorhead emphasizes that the uncertainty created by the proposed export controls could impact the ability of countries to import chips from companies like AMD and NVIDIA.
Oracle’s Financial Performance and Market Sentiment
- Hyman shifts the conversation to the skepticism surrounding AI trade, particularly Oracle, which is scheduled to report earnings after the close of the market tomorrow.
- Moorhead describes Oracle’s upcoming earnings report as a “show-me quarter,” with the most important metric being growth in its cloud business (OCI).
- He notes that the market expects OCI growth of at least 80% to regain investor confidence despite concerns about the debt required for OpenAI and Stargate.
- Moorhead highlights the importance of RPO (remaining performance obligations) as a leading indicator of demand acceleration or plateauing.
- Hyman discusses the broader concern about private credit markets and how they fund companies like Oracle.
- Moorhead mentions his attendance at Oracle’s recent investor day in Las Vegas, where the company focused on its approach to capital commitment — which is closer to a pay-as-you-go model — to address investor concerns about over-reliance on credit and expected ROI.
Companies Mentioned
- NVIDIA
- AMD
- TSMC
- Oracle
- OpenAI
AI-Assisted Keyword Summary
AI chip exports, semiconductor supply chain, oil crisis, export controls, TSMC, data centers, US China trade, Oracle earnings, tariffs, NVIDIA, AMD
Founder, CEO and Chief Analyst | + posts
Patrick Moorhead is the founder, CEO, and chief analyst of Moor Insights & Strategy. His big-picture view of technology is grounded in more than 20 years as an executive leading strategy, product management, product marketing, and corporate marketing functions at NCR, AT&T, Compaq, and AMD. He has shared his expertise in areas from silicon to infrastructure to enterprise SaaS and everything in-between in thousands of national broadcast appearances (CNBC, Yahoo Finance), articles (Forbes, CIO), research-based analyses, and podcast episodes. Today, he has 100+ CXO-level advisory clients and is often ranked the #1 technology industry analyst by ARInsights.
