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

CNBC’s Jim Cramer on Wednesday expressed trepidation about circular transactions between tech companies as Wall Street weighs the value of artificial intelligence heavy hitter OpenAI.

“These days, we’re constantly hearing about what I’d call these ‘Lazy Susan’ deals, except they’re being celebrated as good news for both parties,” he said.

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

Cramer said he finds the deal “quizzical,” wondering if it would make more sense for OpenAI to just buy the chips itself. He mused that it’s possible companies are so eager to be involved with OpenAI that they’re willing to invest money just to get it back. However, Cramer stressed that he’s becoming more and more concerned about these kinds of moves.

There are signs some companies are starting to shy away from lofty tech investments, Cramer said, especially as investors scrutinize OpenAI’s enormous spending commitments — including its deal to buy $300 billion worth of AI infrastructure from Oracle. He noted that a Wednesday report said Blue Owl Capital pulled out of funding a $10 billion data center from Oracle as the firm worries about the tech company’s spending and growing debt.

Cramer lauded Blue Owl Capital’s move, saying the firm is exercising “discipline.” Tech stocks can’t rally until more hyperscalers also display discipline and ease up on their AI spending, he continued.

“It’s simply not safe to bet on these stocks yet, until someone says no to these kinds of circular deals and calls them for what they really are, ‘Lazy Susan’ deals.”

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Disclaimer The CNBC Investing Club holds shares of Amazon.