Slok broke the AI stack into four layers: models/applications, cloud/compute, energy/grid, silicon/equipment.
Silicon and equipment (chipmakers) show 41% profit margins.
Models and applications (OpenAI, Anthropic and similar) show -59% operating margins.
Upstream profits are real but they are paid for by capital raised by the losing layer, not by end-user cash flow.
Goldman projects AI investment past $1 trillion this year.
Hyperscalers have already issued record debt to keep the spending going.
Oracle is running deep negative free cash flow and huge lease commitments tied to its OpenAI deal.
Slok’s bottom line: the high-margin part only works if the low-margin part keeps raising money or growing revenue.
https://fortune.com/2026/08/10/torsten-slok-ai-profit-margins-capex-oracle/