AI Bubble Watch – Gemini 3 Impresses, Oracle and Strategy Slump

OpenAI lost its spotlight to Alphabet’s (GOOG) Gemini 3 Pro last week. Before that, Chinese firms drew some attention. For example, Meituan, Tencent (TCEHY), Baidu (BIDU), and Alibaba (BABA) announced new AI models that competed strongly against OpenAI.All that changed. Gemini 3 and Nano Banana Pro are strong offerings. The former surpassed GPT-5.1 in various benchmarks. It also performed well in multimodal understanding, visual reasoning, and software coding.Once a darling, Oracle (ORCL) quickly erased its post-earnings pop. The database software giant looked like it would buy TikTok after the White House announced a deal. Unfortunately, the announcement did not involve TikTok’s owner, ByteDance. ORCL stock had risen from the $225 range to as high as $345.72. It closed at $198.76 (-10.40% last week).Credit Default Swaps (“CDS”) are pricing in high risks of an Oracle debt default. In September, it took $18 billion in debt financing through bond sales with a 2030 maturity. Other bonds mature in 2065. Earlier that month, OpenAI signed a $300 billion contract with Oracle over five years. The issue is that OpenAI lost up to $12 billion in its most recent quarter ending on September 30, 2025. If funding dries up for the AI firm, it cannot pay Oracle.In the cryptocurrency market, Bitcoin’s rapid fall sent Strategy (MSTR) to a 52-week low of $170.50. Watch out for ETFs selling MSTR stock. That would accelerate a sell-off in this firm, which holds nearly 650,000 Bitcoin.