Weekend Must Reads: Polevikov on Walmart’s Ninth Try At Health with General Medicine, Zitron on the Collapse of the AI Bubble

Two short takes on two Must Reads to make time for this weekend. Neither are short and both are dense. Likely like you, I won’t be reading either at one sitting. But you should put them on the pile.

Walmart Has Failed at Healthcare 8 Times. Now It’s Trying for a 9th. Author: Sergei Polevikov, AI Health Uncut

Sergei ‘goes there’ again with a little-noted move by Walmart to kickstart something significant in the healthcare area. It has inked a deal with TJ Parker, the co-founder of PillPack (sold to Amazon), now CEO of General Medicine, to integrate the General Medicine ‘everyday healthcare store” with Walmart’s Better Care Services, its online healthcare hub. The store comprises not only pharmacy and low cost options for medications, but also specialty care referrals and online everyday testing. You can compare prices online. Walmart release

Readers will remember the eight times previously that Walmart Health, in various and telehealth iterations, collapsed into a heap with the most recent here [TTA 30 Apr 2024, 2 July 2024]. Will this be different? It might, as the heavy lifting is done by General Medicine. 

Of course, the price comparisons, particularly for branded medications, may not be as cheap as expected, but the prices may beat other retail comparison sites. I did some comparing of my own with a medication I am moving to that is not covered by my insurance. The company direct program price for 90 days is less than half of what is on offer with GM. But I had to get the referral from my physician after making my own case that the generic was possibly creating problems for me AND the most popular generic that I was on had a recent recall for sub-potency issues.

The article is available in part to non-paid subscribers. But this Editor recommends you do. Sergei is an unbought investigator in the healthcare field, and provides us with a service that is unavailable elsewhere–even here because we’re primarily a news site. It’s worth your spend because he’s the only one I think of, the ‘go to’, who marshals the numbers and puts together a credible narrative.

FYI you can meet Sergei at HLTH coming up next week. Details are in the article.

Running Dry. Author, Ed Zitron, Where’s Your Ed At?

Ed’s scathing takes on the business of AI are well known to our Readers. In this article, he goes into the fault lines that are widening with AI–and how the money spigots are starting to shut. What does that mean for Anthropic, OpenAI, and healthcare companies like Oracle? What does that mean for our Readers’ suppliers or startups?  As usual, not an easy or quick cuppa read.

He opens with:

As I’ve said for a while, all of this ends when the money runs out — when seemingly-unlimited data center debt becomes distressingly hard to raise, and when AI startups can’t rely on the perpetual availability of venture capital to keep them alive.

And it appears the well is running dry, just as it dawns on everyone that the underlying economics of AI, for labs and data center operators alike, don’t really make sense.

What is really going on with OpenAI when it puts off its IPO, and raises only one-third ($11 billion) of what it hoped for last week? What is really happening with Anthropic, rushing to an IPO but with clear evidence of slowing business and millstones of liabilities? TTA 5 Nov

“The bubble bursts when the money runs out.”  AI is no exception to any kind of startup, from telehealth, RPM, health IT, telecom, deregulated airlines, and tulips. 

And another worthwhile subscription (on sale today!)

 

Rounding up the funding and M&A action of early Q4–plus CVS’ split, Anthropic’s IPO

Your Editor has returned after a fair amount of travel away from the desk. She was also sidelined to attend to some health issues, including a nasty cold that hasn’t quite taken its claws out of her head and lungs yet, and some technical difficulties on our publishing site.

The big news today is CVS’ split that undoes their ‘big bang’ of 2018. Unusually, there’s a lot of early Q4 investment at the Series A level and a bit of M&A action. In AI World, Anthropic finally filed for their IPO while OpenAI is asking for more bridge money. Here’s our selective roundup:

  • Today’s bombshell was that CVS is splitting its lines of business into two publicly traded companies by H1 2028. The first new company will be CVS Health, consisting of Aetna and Caremark, the CVS pharmacy benefit manager (PBM), Oak Street Health, home health firm Signify Health and CVS’ specialty drug business. The second will be CVS Pharmacy, containing roughly 9,000 retail stores and pharmacies, plus the mail order pharmacy, walk-in clinics and Health100 technology services. According to CNBC, CVS Health will be run by current CEO David Joyner, while CVS Pharmacy will be led by Prem Shah, group president of CVS Health. Other executive assignments are TBD. The company’s market value is about $117 billion. Current shareholders will receive shares in both companies. Healthcare Dive

Both companies have done well in recent quarters, so perhaps this was the time to execute a plan that’s been an open secret for awhile. Will it resolve the charges of conflict of interest made against CVS, with the second-largest PBM? Questionable, as the reorganization places specialty drug alongside the Caremark PBM.

We note that the Merlo/Bertolini vision of an integrated healthcare giant lasted exactly ten years–and that Mark Bertolini now heads up Oscar Health, exactly the opposite of a CVS.

  • In late October, Vera Health raised $28.5 million in Series A funding to expand its evidence-based AI clinical search platform. It’s a word-of-mouth story, as it’s accumulated a claimed 800,000 clinicians using it worldwide from a few thousand a year ago. It’s now used across 190 countries, including approximately 1 in 4 physicians in Spain and Italy and 1 in 7 in France. Vera managed to do this with just 12 employees. The Series A was led by Threshold Ventures, with participation from Mantis VC and SV Angel. Existing investors Y Combinator and Gradient tripled down, bringing the company’s total funding to $32 million. Website/release, HIStalk, PYMNTS.com
  • Tegria acquired CloudWave for an undisclosed amount. Tegria is a global healthcare consulting and IT services company that partners with provider and payer organizations. CloudWave is a full-service cybersecurity and cloud services provider for community hospitals and health systems. Release
  • Administrative automation platform ClarityCare raised $16.5 million in a Series A funding, led by global venture capital firm Headline. New investors were Arthur Ventures and FJ Labs and existing investors were Maverick, firstminute, Top Harvest Capital, and Transpose Platform for a total funding of $20 million. According to their very flashy website, they run AI agents inside health plans, payers and TPAs to automate the administrative and clinical work needed to run cost containment operations. Spurring the funding is the CMS Rule CMS-0057-F which mandates a prior authorization decision timeframe of 72 hours for expedited requests, and seven days for standard requests.  Website/release, MedCityNews
  • Midstream Health garnered $20 million in a Series A for its autonomous financial operations platform. This round was led by Valtruis, and included participation from Andreessen Horowitz (a16z), Foundry and CommonSpirit Ventures. Its network covers over 250 hospitals nationwide and emphasizes recovery via monitoring of contracts, claims, rebates, other supply chain areas,  and payments. Release, MedCityNews
  • And closing today’s roundup, Anthropic PBC, which markets its AI tools as Claude, finally filed its SEC Form S-1 to go public on the Nasdaq, trading under ANT. No target date is given, nor pricing and number of shares. The company is presently closely held by founders Dario and Daniela Amodei. Anthropic’s revenue was $16.3 billion for the first six months of 2026, up 1,300% from $1.2 billion during the same period last year. It all looks lovely except that on-balance sheet liabilites total around $117.5 billion (balanced against roughly $112 billion in cash prior to its IPO). Bloomberg Tax and off balance sheet and long-term compute commitments of $895.4 billion. CNBC, Mobihealthnews

Given all this, the Anthropic IPO may not happen until 2027.

Filing for an IPO does not mean it will happen–see Oura. For instance, OpenAI filed initial SEC forms in June, but is delaying their IPO to sometime in 2027. They are currently seeking a bridge raise of $10 to $20 billion this year in advance of the IPO. FT. The WSJ reported that they have subscribers for about $11 billion of this. 

TTA’s Autumn Leaves: Oura puts off IPO, Anthropic’s IPO November (?); Sycamore Partners nearing Boots sale; telehealth support for pediatricians in youth mental health, Oracle’s Congressional spanking, more!

 

2-5 October 2026

Here we are past the first week of Fall (or Autumn). The leaves may be turning, but the healthcare/AI  IPOs aren’t, with the Oura health monitoring ring postponing its IPO indefinitely and the Anthropic AI rumored only for early-to-mid-November. Another turning is for Boots, with Sycamore Partners breaking up the Walgreens Boots Alliance combine for $9 billion. And this week’s Perspectives discusses the burden pediatricians are taking on in youth mental health and how telehealth can support this need.

For Readers: Your Editor will be on publishing leave due to travel to 21 October. ‘Best Of’ Alerts will be out weekly on Fridays and Saturdays after this week till then. Some past highlights:

  • Humanity’s Rumored Doom in 10 years at the hands of AI are Zebras, not Horses.
  • Oracle’s simultaneous strong Q1, 3,000 layoffs, and its two top execs subpoenaed by the House VA Committee for a whacking over the 170% increase in budget to cover the next three years (Congress is Fed Up).
  • How infrastructure tech needed by healthcare organizations can’t get arrested on funding, while whiz-bang consumer apps can.

Please feel free to comment on the articles and pass along this Alert. Let me know if this is worth it to you! Also check out my personal page on Substack.

IPOs, IPOs–Oura’s stalls out, Anthropic’s restarts, possibly mid-November. To everyone’s amazement!

Developing: Walgreens’ Sycamore Partners owner on final approach to sell Boots operation to Canada’s Weston family for ~$9B

Perspectives: What Meta’s settlement reveals about youth mental health, access shortages, and where telehealth can support pediatricians

More of Interest 

Oracle’s continued restructuring cuts 3K more jobs, adds $700 million while revenue grows 30%; House VA Committee subpoenas Ellison, Sicilia 19-0–and why Congress is mad at a 170% budget increase (Updated for how Congress really feels)

(Related) Revealed: Oracle’s extended VA EHRM contract increased by $17B as original ceiling reached this year; VA Indy EHR goes online

AI’s hoofbeats as Horses, not Zebras: a Gimlety view of AI’s destructive capacity (updated) (P(doom) may be conquered by F(doom), or Why Worry?

Perspectives: Digital Health Capital Keeps Rewarding What Patients See, Not What Keeps Companies Alive (Infrastructure tech can’t get funding)

Silicon Valley Bank’s take on H1 investment: among the “have and have nots”, it was “the best half in years” for health tech

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Help Spread the News

Please tell your colleagues about this free news service and, if you have relevant information to share with the rest of the world, please let me know!

Donna Cusano, Editor In Chief
donna.cusano@telecareaware.com

Telehealth & Telecare Aware – covering news on latest developments in telecare, telehealth and eHealth, worldwide.

IPOs, IPOs–Oura’s stalls out, Anthropic’s restarts, possibly mid-November. To everyone’s amazement!

Is it the market, or is it something else that’s putting off the ‘sure’ IPOs? The smart money was betting that the Oura health monitoring ring would have IPO’d on Wednesday (30 Sept) for about $2.1 billion. The employees holding restricted stock units (RSU) and investors would be counting their money by now. After all, Oura has been profitable this year after breaking even in 2025, and there was real enthusiasm when it filed its SEC S-1 right before Labor Day. But on 29 September, when the offering was scheduled to price, it was postponed. Indefinitely.

The Oura press release cited “that it is postponing its previously announced initial public offering on Nasdaq, despite strong demand, due to uncertainty in the IPO market”. No new date was given. Uncertainty is a factor, but there are others specific to Oura.

If you read Endpoints, they cited the Federal Reserve raising its rates a few weeks ago, depressing demand for the rich valuation Oura was seeking; the P(doom) around AI; and Apple introducing a new Watch with improved sensors and an option to order blood tests, as Oura has. There are rumors that Apple will also develop a faceless watch that will copy everything that Oura has. That’s a lot of putting off right there.

Ace investigator Sergei Polevikov in his AI Health Uncut of 29 September digs considerably deeper. Non-subscribers to his Substack platform will see some of this but his main points are that the oversubscribing level was weak at ~4x whereas ~20x for large offerings has been the norm since 2023. Three early VCs-Forerunner, Lifeline, and Elysian Park Ventures–were seeking to exit, never a good sign, and taking $1.53 billion with them. The IPO is also being built on Oura’s promise to deliver predictive health. Whether a ring–a piece of Finnish jewelry–can deliver that and more, reliably and interestingly to a growing user base, is a real question.

What 4x versus 20x says is that this IPO is a ‘nice to have’, not a ‘must have’. No one here has FOMO–fear of missing out.

There are hardware issues–and hardware is the vast bulk of its sales with service subscriptions only 19.8% of revenue.

Last but certainly not least, Oura’s benefit in going public on Nasdaq would largely have gone to the Taxman. Little known fact unless you’ve Been There, Done That: RSUs are treated as employee pay when they vest. The tax is withheld, just like wages. It becomes the employer responsibility, not the employee’s. In net settlement, Oura pays the tax in cash from its IPO proceeds and keeps part of the shares to cover the tax. (That doesn’t count what states do with RSUs nor how laws differ internationally.)

The line on the bottom for Oura after the IPO? The company nets only a paltry $6.2 million because of investor payoff and employee RSU taxation. That is over 98% of the proceeds going to everyone but Oura. 

Have other IPOs been like this? Not many. Evidently a lot of pay went to RSUs spread generously around, not just executive staff. This IPO evidently is to help three major VCs exit nicely–and a ~4x oversubscription wasn’t enough.

Another Ominous Parallel with an IPO that some of us remember: Peloton, once a fitness darling. There are similarities (the enthusiasm, the unfavorable hardware issues, the imbalance between hardware and subscription revenue, unsustainable growth beyond enthusiasts) and differences (the Oura Ring is under $400, a Peloton machine over $2,000, and Oura is profitable). But you’ll have to subscribe (and you should!!) to Sergei’s Substack to see all of his finely worked out and fully buttressed argument.

Oura is not exactly hurting for financing, having raised $1.5 billion over the past decade, with a jumbo $900 million Series E last October led by Fidelity, and an undisclosed corporate round this past July led by Eli Lilly, neither of which are exiting.  Crunchbase

Will Oura IPO this year or next? This Editor cannot see anything that was cited as changing the picture if the IPO were tomorrow or in the next few months.  Also Mobihealthnews

About the Anthropic IPO, the financial press is agog with talk that its engines may restart by mid-November. The date is rumored to be 9 November. Anthropic executives will meet with investors on 14 October to build a case for a $2 trillion offering, which would be an all-time record for an IPO.

Readers know that the IPO talk, explored since May, came to a screeching halt right around 9/11 with the talk of P(doom) [TTA 17 Sept] and Federal regulation. Some believe that these ‘external brakes’ were applied because neither Anthropic nor OpenAI were ready to IPO and it was easier to create Doom than to postpone directly. But here we have it at least for Anthropic, even if the fundamentals scream “warning”! Certainly the incentive to beat OpenAI to the IPO is still there. Anthropic, which was created by OpenAI bolters, surely want to ring that bell on either Nasdaq or NYSE (another small matter to finalize) before Sam Altman. Here we go again! Yahoo Finance

TTA’s Summertime Wrap: Taking apart Humanity’s AI Doom; Oracle’s layoffs, financials, and House subpoenas; and how infrastructure health tech can’t get funding

17-30 September 2026

It’s hard to believe that the last Alert was before Labor Day, and here we are staring at the chronological End of Summer, bracing for a cold winter again. The 25th anniversary of 9/11 (real doom) was followed by Humanity’s Rumored Doom in 10 years at the hands of AI. My essay takes it apart and puts it back together. (Pro Tip–trust no one). We also caught up with Oracle trumpeting its Q1, laying off another 3,000, and its two top execs subpoenaed by the House VA Committee. This week’s Perspectives is about how infrastructure tech needed by healthcare organizations can’t get arrested on funding, while whiz-bang consumer apps can.

Please feel free to comment on the articles and pass along this Alert. Let me know if this is worth it to you! Also check out my personal page on Substack.

For Readers: Your Editor will be on a second publishing leave to 1-2 October. ‘Best Of’ Alerts will be out 1x weekly only on Fridays after this week till then. I’ll be resting up for what may prove to be an epic Q4!

Oracle’s continued restructuring cuts 3K more jobs, adds $700 million while revenue grows 30%; House VA Committee subpoenas Ellison, Sicilia 19-0 (The Oracle soap opera grinds on)

Perspectives: Digital Health Capital Keeps Rewarding What Patients See, Not What Keeps Companies Alive (Infrastructure tech can’t get funding)

AI’s hoofbeats as Horses, not Zebras: a Gimlety view of AI’s destructive capacity (updated) (P(doom) may be conquered by F(doom), or Why Worry?

Most recent headlines 

Silicon Valley Bank’s take on H1 investment: among the “have and have nots”, it was “the best half in years” for health tech

News roundup: Verma’s rumors, DEA’s new (?) telemedicine rule goes to OMB for review, Cityblock Health goes rural with Homeward buy, Scottish housing sensor tech could save millions–study

Revealed: Oracle’s extended VA EHRM contract increased by $17B as original ceiling reached this year; VA Indy EHR goes online

Must Reads

This Week’s Must Reads: how lack of focus dooms startup financing, Commure’s Sea of Red Flags Flapping, and what happens if OpenAI expires? (Doom…DOOM!)

Why Readers can be assured that TTA is 100% Written by Humans (A handy guide to detecting AI Copy Slop and why it’s not here)

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Advertise on Telehealth and Telecare Aware
Support not only a publication but also a well-informed international community.

Contact Editor Donna for more information.

Help Spread the News

Please tell your colleagues about this free news service and, if you have relevant information to share with the rest of the world, please let me know!

Donna Cusano, Editor In Chief
donna.cusano@telecareaware.com

Telehealth & Telecare Aware – covering news on latest developments in telecare, telehealth and eHealth, worldwide.

AI’s hoofbeats as Horses, not Zebras: a Gimlety view of AI’s destructive capacity (updated)

Gimlet EyeA longish holiday does provide some Perspective of the Gimlety View. What blew up during the last big summer holiday, as I was building my Vitamin D for the long winter while at the Jersey Shore, was the news made by one Jacob Coxon, a former researcher at Anthropic (developer of Claude), that advanced AI within 10 years has a more than 10% chance to have the ability to hack into enough systems, initiate bioweapons, nukes, and otherwise kill off Humanity. The humans who originally designed it would be unable to stop rogue (and roguish) frontier AI. This started with Coxon’s well-timed posting on X on 8 September and percolated through tech media right before the 25th anniversary of the mass murders on 9/11/01. Mass media, already overheated because of the anniversary, exploded like a pressure cooker. 

Axios, the techie bulletin board and for generalist media types a source for pithy quotes, on 9 September quoted a MIT 2025 study of “experts” giving a 21.5% chance of “AI possessing dangerous capabilities”, with a 21% chance of AI initiating “Cyberattacks, weapon development or use, and mass harm”.  It was a reasonably analytic article full of nuggets for a writer to run with.

This past week introduced us to the latest pop tech slang, P(doom), a cute term for the percent chance of AI Doomsday. P(doom) has now surfaced everywhere from Elon Musk to Anthropic’s CEO Dario Amodei. (Impress your friends and relatives at the next cocktail party or tailgating/cookout.)

The mass media in the following week ran with quotes by Coxon, old tech stalwarts, and politicians. Plenty of P(doom) predictions. Emblematic of the coverage was the Los Angeles Times recap published on, ironically, 11 September, a day of real, not theoretical, doom.

Readers know from my running coverage that this Editor is skeptical of AI both in a business sense (a financial time bomb) and of its utility in its current models. Automating many functions within healthcare? Sure. Providing deeper insights into imaging to speed diagnosis? Faster drug development? Bravo. Speeding market and marketing analysis, sussing out needs? Hey, hey! But equally I have been scathing of companies that buy AI services and believe vendor promises, without cross-checking for accuracy, dumping the skilled humans doing these jobs in mass layoffs. These people are the boots on the ground who should be doing the cross-checks and upgrading the models that come from developers usually unfamiliar with medicine and healthcare–and certainly without deep and specific knowledge the boots have. It turns out that the mass layoffs in many companies, from team managers, data analytics, customer services, marketers to operations, have been to fund so-called investments and token spending in AI tools. ROI has gone into a Missing Man Formation in the finance department, while services to customers and in healthcare, patients, go sideways–as does market share and revenue. CFOs, funders and Mr. Market are just waking up to this surprise that they forgot to teach at HBS. 

I’ve also been scathing in coverage of certain companies such as Open AI, Oracle, and somewhat so of Anthropic, Microsoft, Meta, and Google. These companies are pushing one to two year bricks-and-mortar data center development without responsibility for local effects on water, power, noise, and land use–something that a GM, Ford, Toyota, or Worldwide Widgets building a factory would face and mitigate. This thoughtless pushing is proving to be politically evenhanded in opposition; these companies have received epic wedgies and a few pitchforks in their metaphorical derrieres as a deserved result. But this is manageable; because of pushback, it’s diminishing as a ‘reason why’ except as a political club for unscrupulous politicians.

What’s a lot more devastating is that apparently all the forecasting is inflated beyond belief. There is no decent idea of metrics, of matching up capacity to future demand. Not by OpenAI, not by Anthropic as they prep for IPOs. This is an ancient problem that always, reliably, cyclically bites developing sectors in their nether regions. Not a hype cycle like we saw circa 2006-15 with telehealth, not bad management, but in other industries within recent memory, with ‘sky’s the limit’ booms followed by a crash and partial/total hull loss:

TNW discusses in a deeper dive the debt structure and why PIMCO could make this bet where banks could not [reference is to Oracle’s debt funding]. The question it raises is whether the furious pace of data center building is another cycle of overbuilding–and if it is, will it be absorbed in time? The ominous parallels: the 2000s building boom in an earlier iteration of data centers, the fiberoptic boom of the early 2000s that broke WorldCom, Global Crossing, Winstar, Corning, and 360Networks, cloud overbuilding that left Amazon Web Services with years of excess capacity (it helps to have a deep-pocketed and not all that transparent parent), and others. This Editor would also liken it to the early years of 1980s-90s airline deregulation (too many airlines, too much debt, too many seats) and about a decade in the cruise ship industry where too many cabins were chasing too few people. These took decades and multiple bankruptcies to settle. TTA 7 May

Writer Ed Zitron, who has few parallels in Gimlety-ness, analyzed how OpenAI could easily meet the Devil of Demise sooner rather than later in his article What Happens If OpenAI Dies?, one of our Must Reads of 19 August. OpenAI’s losses are terrifying, contrary to their PR spin, and will not change in the immediate future; based on the numbers, their growth is slowing. It has to become the most successful company since Caesar Crossed The Rubicon–or it croaks and may well pull down an economy with it. I will add from other reading that Anthropic, ahead of OpenAI, is painted in a similar corner.

Leaving aside P(doom), what we are hearing are hoofbeats from horses, not zebras. What’s happening is the AI boom cooling and billions in concentrated funding that has hit multiple headwinds. Both companies have trillion-dollar valuations and heavy debt. Technical and security concerns are popping up like weeds (see the Hugging Face sandbox breakout).  Failures might not be the end of the world but not a cheerful earful for a stressed economy.

In the short term, the two major AI companies have more of a challenge from F(doom)–financial doom–than P(doom).

Suddenly, we have three things happening in the past 10 days:

  • A short-term, low-level former Anthropic employee, Jacob Coxon, with few followers on X, suddenly bursting out and ‘going wide’ with a doomsday prediction. Quoted and covered everywhere in mass media with the things that at least some of his elders like Steve Wozniak and Geoffrey Hinton have been saying for over three years. (The Woz I’ve traced back to 2015!)
  • Dario Amodei, CEO of Anthropic, Sam Altman, still CEO of OpenAI, and Elon Musk (Grok/X) then calling for government safety regulation. Not guardrails. Government regulation by a Federal agency, NIST. CNBC, OpenAI blog, Amodei blog statement
  • Online ‘surveys’ stating that the public is now terrified of AI, with 63% rating Humanity’s Destruction from ‘moderate risk’ to ‘almost certain to happen’. (POLITICO) 

Private companies demanding government regulation of their business truly boggles the mind. This should raise red flags as to why, and why now, and who writes those regulations.

P(doom) supposedly has a ten-year horizon. F(doom) works far faster, may be more likely, and once it starts, there may not be an Anthropic or OpenAI to worry about.

Some Gimlety Speculation, IMO only:

  • Both Anthropic and OpenAI float on a sea of red ink and Other People’s Money (OPM). Their lenders want to monetize and exit their investment with an IPO. Both companies were racing to IPOs. Except neither company is logically, reasonably, in any financial sense, ready.  Yet Anthropic was due to IPO before end of 2026 with OpenAI racing to beat them.
  • Investors are also pushing for another OpenAI funding round to cash out secondary shares held by employees, according to CNBC today (16 Sept). Which, in a case of an IPO, means more shares for the investors.
  • Both the Coxon media pickup and the subsequent Amodei/Altman calls for regulation effectively stop the IPO clock. One can speculate about the timing and origins, but it is fortuitous timing for both companies. .

It is also being used as a political club in the upcoming midterms. Goosing the ‘terror’ narrative is calculated to pay off certain players.

  • The usual Senate suspects are demanding complete regulation of AI because “we are losing control”. There is a bipartisan bill in the House (Lawler/Gottheimer) drafted to regulate frontier AI, kicking the standards over to the National Institute of Standards and Technology (NIST), but the House is now out of session until 9 November, after the midterms, which leaves exactly two months before a new House is seated. There is a parallel bill in the Senate.
  • President Trump, somewhat on the back foot on this, calls their fears a ‘hoax’ and a ‘scam’ that will prevent US leadership in AI development. Yet Sam Altman along with Nvidia’s Jensen Huang will be attending the state dinner for Chinese President Xi Jinping’s visit to Washington next week,
  • The security threat is real. China is building a lot of data centers, well away of course from any international observation; Uyghurs don’t get to complain about data centers and water usage to Beijing. One doesn’t even know if they are real or empty buildings like their empty hinterland cities. Where are the chips coming from? Yet Chinese-engineered AI models may take the lower end of the market, much like steel.

There’s an old saying in medicine: when you hear hoofbeats, think first of horses, not zebras. It dates back to Dr. Theodore Woodward of the University of Maryland medical school and the 1940s in teaching his students to first rule in or out common diseases rather than searching first for exotic, rare diseases because they’re more interesting. (Apologies to those with rare diseases, and may AI be a savior in this.) Taking the analogy to business, the ‘horses’ are the shaky business models around AI development, capacity versus demand, the heavy debt of the two AI leaders, and data centers. Throw in the Chinese capacity and models. The ‘zebras’ are Humanity’s Extinction By AI. They’re there, but in the next county.

What’s running in that herd out there, who’s trying to paint the horses black and white, and why? Cui bono? The consequences can be severe.

Updated 17 September: Gary Marcus, Substacker and BBC commentator, in his latest ‘Marcus on AI’ takes an even more Gimletly view than your Editor. He points out the stratagems behind Altman’s and Amodei’s calls for regulation. It’s all ‘trust us’ to write the regulations and guarantee safety. We shouldn’t. Meanwhile, certain Senators go over the top on Doom with the aim of terrifying voters. We shouldn’t. A Must Read. And if you are working with AI, worth your subscription.

TTA’s August Ice Cream Run 3: less activity is more for startups, hard looks at Commure and OpenAI, acquisitions by UHS, DocGo, R1–and UK’s Alertacall sold

20-24 August 2026

Enjoy the August Doldrums, because this fall might be awfully…eventful. Our Must Reads are rather Doomful, between exposés on General Catalyst and Commure’s business practices, plus OpenAI’s accelerating troubles that look like Sam Altman is flirting hard with the Devil of Demise. A positive Must Read is on early-stage funding–how doing less will get your company more. Our news roundup highlights several acquisitions and Anthropic partnering with EHR PointClickCare. Speaking of sales, UK’s Alertacall has been sold after great success, and will remain independent.

On the hot subject of AI writing and AI Copy Slop, find out how to spot and avoid it in our thoughts on why TTA remains stubbornly 100% Written By Humans. Grab the cuppa for this one. Else you’ll faint like Pepper!

Please feel free to comment on the articles and pass along this Alert. Let me know if this is worth it to you! Also check out my personal page on Substack.

This Week’s Must Reads: how lack of focus dooms startup financing, Commure’s Sea of Red Flags Flapping, and what happens if OpenAI expires?

News roundup: UHS-Talkspace $850M buy final, DocGo to buy Hicuity Health for $52M in stock/debt, R1 to buy Humata Health, PointClickCare EHR to integrate Anthropic’s AI

UK’s Alertacall sold to Constellation Software’s Volaris Group

Last week’s headlines

Why Readers can be assured that TTA is 100% Written by Humans (A handy guide to detecting AI Copy Slop)

News potpourri: OpenAI sued for practicing unlicensed medicine”, Cleveland Clinic med drone delivery, Solventum separates out health info systems, Unlimited Technology RCM in 3.8M data breach, Samsung Galaxy Buds FDA cleared for hearing assist

VA moves to secure Oracle for its EHR Modernization through mid-2031 (More reasons beyond the obvious)

Breaking report: Oracle drawing up plans to lay off employees in “double digit percentages” by 1 September (We’re waiting for this shoe to drop)

Recent Headlines and Must Reads

News roundup #2: Function Health’s jumbo $450M raise from General Catalyst, Hinge Health’s $105M Cylinder buy, and Throne Science’s $10M Series A

News roundup #1: AI governance ‘in’ with Feds, ATA; Centene’s shrinking but more profitable future; repositions and partnerships for DispatchHealth, WHOOP; Te Whatu Ora Health New Zealand modernization

Chutes & Ladders, Oracle Edition: Surprise! Project Jupiter data center build overages, “social costs” multiply. Pentagon inks $7B, 10 year deal for software.

This week’s Must Read: the dangerous financing of AI data center buildouts–and how they resemble the 2020 health tech boom (Remember the SPAC boom that cracked and left nearly all companies and billions in the dust?)

A gloomy view on Oracle going forward: debt, cash flow, and dependence on OpenAI

 

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This Week’s Must Reads: how lack of focus dooms startup financing, Commure’s Sea of Red Flags Flapping, and what happens if OpenAI expires?

Grab a cuppa and sit down with these articles. (You may also want to subscribe to their authors.)

From Substack, UK author Martyn Eeles current Health VC newsletter, “The Strategic Clarity Problem”, advises founders of early-stage companies that doing more can result in less–financing. Too much activity in too many directions leads to confusion on investors’ parts. Paradoxically, it doesn’t enhance “potential” but detracts. It reads to investors, especially now, as lack of priorities and not strategic. Mr. Eeles recommends focus, focus, focus. Choose a strategy and stick with it. It doesn’t mean that a founder cannot show multiple future paths, just that the main path has to carry the company forward. (Sounds like good marketing!)

For instance, how you present your direction is vital in making activity sound focused and strategic. FTA:

A founder who says, “There are many use cases,” may sound ambitious. A founder who says, “There are many possible use cases, but this one is the wedge because it creates the clearest buyer urgency,” sounds more investable.

A founder who says, “We have lots of partnership conversations,” may sound active. A founder who says, “These two partnerships matter because they reduce implementation risk and create access to the customer segment we are prioritising,” sounds strategic.

The short (non-subscriber) version has a wealth of information for both founders and funders, complete with a nifty infographic that depicts nearly the entire article. but truncates at ‘The Choices Investors Want To See”.  This Editor would recommend the annual €60 subscription if you’re in the business. Mr. Eeles is managing partner at Clarma Capital, a European life sciences venture fund.

Our friend Sergei Polevikov writing in his Substack AI Health Uncut returns to the General Catalyst-powered Commure in Commure’s Long History of Red Flags. Even though General Catalyst doesn’t want him to.  Yes, the flags still flap around the gaggle of health tech companies financed by General Catalyst (GC). Commure itself is an agglomeration of GC companies: Athelas, Augmedix, RxHealth, and Memora Health. Commure originally had one marketable product, Strongline, a safety and duress badging/tracking system, three years ago before GC’s consolidation moves. What is questionable about Commure has now surfaced in STAT News +’ investigation (paywalled). From pricing dependent on recommendations to products that don’t work until they’re modified at the client if they eventually do work, to referral programs that are way too close to violating the Anti-Kickback Statute…Commure has it all on the Shady Side of the Street. GC keeps shoveling money in because they can, too. 

And once again, thinking the unthinkable, is Ed Zitron. Here he imagines the demise of OpenAI and reads the tea leaves. He notes:

  • the deceleration of revenue when it needs to accelerate (see below)
  • the COO and CRO left after less than a year on the job, likely walking away from generous stock options/awards–now, who does this?
  • it’s backed away from its IPO and likely will be beaten to it by Anthropic (Claude)
  • the economics are terrifying. OpenAI lost $20.9 billion in 2025 on $13.07 billion in revenue
  • it needs to meet compute obligations and for that needs $800 billion in cash
  • it needs to raise $100-200 billion annually just to survive

In short, it has to become the most successful company since Caesar Crossed The Rubicon–or it croaks. Expires. Meets the Devil of Demise and the Devil wins.

The consequences will be severe. FTA:

To not actively and meaningfully discuss the potential for OpenAI to collapse is actively irresponsible. To act like there are not significant, existential problems with this company’s economics is to intentionally avoid reality, and whoever is on the receiving end of said ignorance deserves better, be they an investor reading your analyst note or a reader burdened with incomplete journalism.

What follows may be an Enron-Lehman Brothers hybrid, one that leaves unbelievable destruction in its wake, an avoidable systemic risk empowered and enabled by a kneecapped media industry and sell-side analysts incapable of seeing further than two quarters in the future.

The time to stop this? Long past.

Zitron backs everything up with hard numbers laced with cross-references. It’s dense and needs close attention. Depending on your view,  you’ll choose a gallon of coffee, a fifth of bourbon, or a bottle of wine. What Happens If OpenAI Dies?

Another argument, shorter, and similar, is made by Gary Marcus in his Substack newsletter (free access), Marcus on AI,  BREAKING: OpenAI’s unraveling has begun.  Again, just as it was scheduled for its IPO and racing its main competitor.

It contains two citations from the Wall Street Journal writers who cover OpenAI, Berber Jin and Corrie Dribusch:

  • “The company grew revenue by just 18% to $6.7 billion from q1 to q2, while its losses sank further into the red”
  • Losses grew from Q1 to Q2 to $3 billion to $12.3 billion, while it added only $1 billion (to $6.7 billion)

Nvidia is in full CYA mode, given its exposure to OpenAI. Can Oracle be far behind?

Chutes & Ladders, Oracle Edition: Surprise! Project Jupiter data center build overages, “social costs” multiply. Pentagon inks $7B, 10 year deal for software.

The Unexpected in the Terra Incognita of data centers whip up The Perfect Pricey Storm for Oracle. Oracle knows how to build software, not huge data center buildings. Buildings have messy things like power supply, coolant, and permitting at the local and state levels. There is also The Unexpected that any experienced builder will factor in even when unknown, whether it’s overruns for wiring, racks, chips, out of spec cement, etc., that delay Opening Revenue Day. The Unexpected increasingly includes what is termed “social costs” that start around genuine concerns such as power draw, transmission lines, water usage, disruptions, even heat foci (a Cornell Tech study found a 10 degree rise on current data centers). Many local “interests” use these tentpoles to support the classic tactics of dissuade, delay, and (ramping up) the difficulty. When the pockets like Oracle’s aren’t deep and labeled ‘debt’, this hurts.

In the New Mexico west bordering Texas, where it’s underpopulated and land is cheap, Oracle’s 1,400-acre, 2+ gigawatt Project Jupiter super data center build for OpenAI is hitting roadblocks, primarily around power. The original plan to power it with gas from its own natural gas plants hit environmental potholes. Then Oracle switched to natural gas fuel cells from Bloom Energy. They use little water, pollute less and are reasonable in carbon emissions. But the cost? $8 billion, a few billion more than the gas plants. They also have other sticky requirements; to not degrade, the cells must continuously run, which scuppers Oracle’s plan to switch off to far cheaper solar on sunny days. TTA 7 May

New Mexico and to a lesser degree west Texas have rising environmental concerns. New Mexico in particular is generally hostile to big business and fossil fuels. The natural gas pipeline needed to supply the cells that runs through New Mexico is on its second rejection by the New Mexico Environment Department. The next hearing isn’t till 19 October. The cherry on this cake? The state Attorney General is investigating complaints from local residents that their names were used fraudulently in support of said fuel cells. The greenhouse gas emissions are also claimed by environmental groups to be equivalent to New Mexico’s two largest cities, a claim that evades logic for Albuquerque alone. These groups now are pushing for a data center moratorium, a growing national cause that ignores that the data center is partly built, the water being used is non-potable from outside the area, and that the builder, Oracle, is working hard to respond to critics in the local areas by plowing money into local concerns.

Oracle isn’t the only one, but the one with the least resources. Oracle, Microsoft and OpenAI projects in Wisconsin are having costly difficulties with power authorities on building transmission lines and cost sharing. This may add another overrun of $100 million to Oracle/OpenAI’s Port Washington, Wisconsin data center. Oracle’s low credit rating also hurts them, where Wisconsin’s state power regulator is requiring financial guarantees in cash or lines of credit in case the project fails. This will cost Oracle $100 million–annually. In Texas, Big AI such as Meta and Google are having more success in partnering with local power utilities in building permanent infrastructure and renewable sourcing, including closed water systems to prevent toxic wastewater runoff into land and local water systems.

So why is Oracle making a chancy bet at the Data Center Infrastructure Landlord Table? Concluding from The Information: “even though the cost to build and power a gigawatt of AI is bordering on at least $60 billion, Nvidia servers powered by its Grace Blackwell chips, renting out at $3.50 an hour, could generate around $12 billion to $13 billion a year, including operating costs.” Your Editor reads this simply as a 4-5 year payback. However, that statement rests on a mountain of assumptions–that hourly rental costs remain high, that build costs remain somewhat stable or lower, that land and construction stay relatively cost static, that the small coterie of AI customers keep paying their bills, and that local groups do not succeed, as they seem to be doing, in increasing costs, demanding moratoria, and delaying online dates.

There are many reasons why Oracle’s bonds are hovering just above ‘junk’, as Mr. Market keeps reminding us. Computing UK. Add to that list that data center cost assumptions have gone spectacularly sideways and the expectations within Oracle didn’t account for (drum roll) The Unexpected.

Oracle did have some very good news last week from the Federal Government for its first Ladder in awhile. The Department of War (a/k/a Department of Defense) is contracting with Oracle for software in a deal that could be worth up to $7 billion over ten years. The exact contract has a base value of $3.31 billion for the first five years of the agreement and a total value of $6.99 billion if the additional option years are exercised.

The DoW Enterprise Software Initiative (ESI) puts contracting into a centralized framework to expedite procurement, versus the typical individual procurement process by separate agencies. The DoW ESI covers procurement for intelligence agencies and the Coast Guard. According to CNBC, “The contract covers the use of Oracle software in on-premises data centers for branches of the military, the U.S. intelligence community and the Coast Guard, according to a statement. The Central Intelligence Agency was Oracle’s first customer. A five-year base period for the contract includes perpetual and subscription-based software licenses, maintenance and consulting, according to one description.” DoW in its own release expects savings of $441 million when compared to the cost of buying Oracle products separately. (And come on, fellow writers. It’s the Department of War at the top of the release, not the Department of Defense, whatever arguments including historical you may have about it.) Oracle release, Federal News Network

This week’s Must Read: the dangerous financing of AI data center buildouts–and how they resemble the 2020 health tech boom

For this week’s Must Read–now that we are past World Cup and mostly past America250–here’s another bracing essay from Ed Zitron’s Where’s Your Ed At in The Subprime Data Center Crisis. Get a couple of cuppas and some time–it’s dense.

Mr. Zitron compares how data centers are financed today to the pre-2008 boom in collateralized debt obligations (CDOs) that insured mortgage bonds. CDOs, by raising money around these bonds near-endlessly, subsidized an artificial boom in housing demand stimulated by  historically low interest rates. Those of us around (nearly all our Readers) know how badly that wound up in 2008, with the circular grift crash taking down Lehman Brothers and other financial institutions and putting us into a four-year recession. It also made financing nearly unavailable for health tech companies just getting out of their Series A or B.

CDOs aren’t financing data centers, but Special Purpose Vehicles (SPVs) are. The SPV raises debt financing for a data center and sells it to institutional investors, asset managers or banks. The SPV makes the payments to the contractors and suppliers such as Nvidia for chips. How they pay interest on the debt is via a special account. Finally, when the data center starts to generate revenue, the SPV uses those funds to first pay for the operating expenses of the data center, then creditors (based on their seniority in the debt), then whatever is left goes to the holding company, such as CoreWeave. It reveals how companies like Meta, Google, Amazon, and Microsoft are financing their data center builds. (It does appear on this Editor’s reading that Oracle, by directly taking on debt, is taking a different route.)

It’s a complicated scenario. The analogy he draws is that the financing for data centers is equivalent to the subprime mortgages of 2008. It’s  compounded by the apparent fact that capacity being built in the pipeline far outstrips demand by a factor of 15, based on an industry report cited by Mr. Zitron. In addition, the demand is not from profitable companies. He cites that “70% to 90% of that demand is from Anthropic and OpenAI’s unprofitable services.”

It also assumes three factors govern AI expansion in a grab for world savings looking for safe bets:

  1. AI data center demand is infinite and all compute will be used.
  2. AI data centers all have “locked-in customer demand.”
  3. That these are “safe” investments, backed by the richest companies in the world.

Exactly what demand is out there? Companies and countries are guessing and making huge financial bets. Mr. Zitron basically calls it an AI bubble inflated by AI companies and abetted by the media because no one is accurately measuring the demand versus capacity.

It’s a scenario that screams ‘red flags’ and ‘Danger, Will Robinson’.

Read, you decide. 

But the scenario Mr. Zitron outlined raised the goose pimples on this Editor’s neck.

Those of us in healthcare have been to this rodeo before. And the bronco riders were all taken to the ER. Or the morgue.

If the term SPV sounds a little familiar to Readers, to this Editor, the term and the structure strongly resemble Special Purpose Acquisition Companies (SPACs) which for a time in 2020-2022 were the It Girl of getting around the typical IPO process for many a health tech company, such as Babylon Health. Admittedly, SPACs and SPVs work differently. SPACs raised money from investors, IPO’d themselves to raise more money, and then in an ‘blank check’ transaction, sometimes with additional investment, acquired a private company, thus taking it public. All in 3-6 months! Simple, right? None of the muss and fuss, due diligence, or SEC scrutiny of an IPO. And as a device, it’s still being used.

Yet look at the outcome in healthcare. Nearly all of the healthcare SPACs ‘cracked’ after 2023 with stock values cratering within months or a year, Hims being one of the very few exceptions and maybe the only one. 30% went bankrupt. 26% were acquired well below their IPO price. And the remainder survive, some having flirted with the Devil of Demise, all below their IPO and valuation. For a tidy summary of the rolling SPAC collapse, read TTA 10 April 2025 and 26 June 2024. 

But what CDOs, the current AI bubble, and the 2020-2022 health tech/telehealth bubble have in common is a complicated way of financing designed to skirt regulations and proper market analysis, coupled with a healthy dose of illusions. Each bubble is based on a set of assumptions that envisioned endless geometric growth and future profitability, coupled with a “desire to believe” that negated logic and the entry of outright fraud. In 2020, we had a real lack of accurately gauging demand for health tech and telehealth services, especially in direct-to-consumer and telementalhealth services. The healthcare SPAC bubble also misread the viability of companies and their business models, many of which had more in the realm of hopes and founder dreams than validity in the marketplace. SPACs evaded scrutiny and created great headlines for this Editor. It was endless. Apprehensions were brushed away. It was also unsettling to this Editor who had a very small role in a long-ago iteration of a financing and business boom/bust–airline deregulation–at two airlines.

When the 2023 crash came, wiping out billions in investment, it was pretty much confined to healthcare and health tech. It’s still being worked through in the consolidation of health tech (not all bad and to be expected), in bankruptcy court (23andMe), and the outright frauds in Federal courts (Done Global). To quote myself from June 2024: The investment scene in health tech and AI strongly resembles the Wild West days of airlines post-deregulation 30 years ago. Investor money in, now fleeing for the exits, whether the bankruptcy court or passing the hot potato to others with money.

AI, of course, dwarfs the SPAC-driven health tech boom by a 1000X factor. And has the capacity to take down a world economy.

Chutes & Ladders: Data breach clouts Clover, OpenAI agent escapes sandbox to attack Hugging Face, Precision’s surface BCI achieves thought control, Tempus AI $1.5B Personalis buy, Karoo Health’s $16.2M Series A

In the Chutes department, it’s an insurer breach and an AI model that broke dramatically out of its sandbox.

Clover Health reported that three employee accounts were breached. The breaches were implemented through a ‘classic’ social engineering scheme such as phishing–the kind that this Editor was trained on years ago when she worked in marketing for a unit of a well-known health insurer. This sounds minor except that the three accounts were of “non-managerial employees with access to member visit-scheduling and broker-facing sales functions.” However, these employees also had access to some personally identifiable information (PII) and protected health information (PHI) of members. Apparently, there was outside, non-authorized activity because Clover’s SEC Form 8-K filing reported that it was “contained and terminated” but Clover is still investigating the extent of the breach and must complete required reporting and member notifications. The employees did not have access to claims or corporate financial systems. Clover Health, considered a pioneering ‘insurtech’, has remained relatively small, with 156,000 Medicare Advantage PPO members in Georgia, New Jersey, Pennsylvania, South Carolina, and Texas. Healthcare Dive

Agentic AI Gone Wild–the breakout of its sandbox of an advanced OpenAI agentic AI system into Hugging Face’s open-source AI model repository platform. OpenAI admitted in a blog post published yesterday (21 July) that the attack originated during internal testing of its own AI models. In what it called an “unprecedented cyber incident”, their own investigation revealed that “we now know that this particular incident was driven by a combination of OpenAI models — including GPT‑5.6 Sol and an even more capable pre-release model, all with reduced cyber refusals for evaluation purposes — while being internally tested on a benchmark⁠ of cyber capabilities.” Even though the testing was run in a ‘highly isolated environment’, OpenAI admits that the models found a way to gain internet access and attacked Hugging Face’s servers. Hugging Face detected and stopped the activity while OpenAI claims it found the activity internally. What’s scary is that Anthropic (Claude Mythos) and OpenAI now have had ‘out of the sandbox’ incidents in their frontier AI development worlds. As OpenAI put it, “The incident also makes clear that advanced models can discover and exploit novel attack paths in real-world systems without source-code access. It highlights that advanced cyber capabilities must be developed alongside stronger safeguards and defensive tools.” Hugging Face reportedly had to use GLM 5.2, an open-weight model developed by Chinese firm Z.ai, to investigate it because US AI models had restricting guardrails that blocked investigation. Computing 21 July, 22 July

And there are a few Ladders this quiet week.

Precision Neuroscience has successfully implanted its brain-surface brain-computer interface (BCI) into able-bodied test subjects and achieved successful thought-controlled cursor control. Unlike Neuralink, Precision’s implants rest on the surface of the brain, not in the brain. Neuralink’s subjects are also are mobility-impaired [TTA 10 July]; Precision’s patients have full movement but had neurosurgical procedures for a variety of reasons. By enrolling in the Precision research study, the patients were able to move solely by thought cursors to navigate games like Pong and Mario Cart on tablets and smartphones while in recovery. The 510(k) investigational devices were removed in a five-minute procedure before the patient went home. This is a real advance for a less-invasive BCI. Mobihealthnews, video (YouTube)

Tempus AI has agreed to acquire Personalis for $1.5 billion. Both are public companies listed on Nasdaq. Tempus AI is a precision medicine company using AI to analyze data for personalized care and therapeutics. Personalis is a cancer genomics company that uses DNA minimal residual disease (MRD) testing to detect cancer recurrence. The offer to Personalis shareholders is for $16.25 per share of common stock which was a 6% premium to last Friday’s closing price; it closed today (22 July) at $12.47.  The deal is for Tempus shares with the option for cash. Personalis had Q2 preliminary revenue of $22.4 million. The transaction is expected to close in late 2026 or early 2027. Mobihealthnews, Tempus release

We close with a fairly hefty (for these days) $16.2 million Series A for cardiovascular tech company Karoo Health. The oversubscribed raise for the Albuquerque, New Mexico company was led by 7wire Ventures and Allumia Ventures, with participation from First Trust Capital Partners, LLC, SpringRock Ventures, Hyde Park Angels (HPA), and other marquee investors. Karoo combines on-site and virtual care teams with their proprietary technology in cardiac care for cardiology practices and health systems in a value-based care model that connects, patients, providers, and payers. The technology platform is designed for earlier detection, improved coordination, and data-driven care delivery. Karoo release, FierceHealthcare

A gloomy view on Oracle going forward: debt, cash flow, and dependence on OpenAI

Oracle is beginning to turn into one of those cautionary case studies. And that’s not good news for healthcare. From their faltering EHR to the hacking of their software, Oracle’s news hasn’t been cheerful. While still profitable in the quarterly reports, the debt load and its obligations in their chosen wrenching changeover from a software developer/seller to an AI infrastructure landlord have been followed by speculation. The latest speculation from June is selling their EHR business [TTA 2 June]–if they can find a buyer. The EHR is a distant second to Epic in every metric [TTA 27 May] and Oracle has an immense obligation to the Federal Government for both the Military Health System (MHS) and VA’s EHR Modernization that won’t complete projected rollout until 2031.

A recent analysis published in Seeking Alpha (may require free account, PDF here) will give one further pause.

The debt load is a crusher. There’s anywhere from $72 to $100 billion in debt on Oracle’s books, and that preceded the PIMCO financing of $16.3 billion that included equity. Their credit rating from major raters is one step above junk: BBB-negative from S&P Global Ratings and Moody’s Baa2 Negative outlook. [TTA 7 May] Oracle has already projected it needs more: an additional $40 billion in fiscal 2027 through a mix of debt and equity.

Net debt is soaring. Oracle ended FY 2026 with net debt of $97.6 billion. This represents a ~20% increase versus the $81.4 billion of FY 2025. Looking forward, this analyst is projecting that the net debt by end of FY 2027 will be in the range of ~$120 billion.

There’s another little problem called cash flow. Years of positive free cash flow, even during the pandemic recession, turned sour in their FY 26 to a negative $23.7 billion. The analysis states that Oracle is now heavily dependent on external cash–debt–to finance its AI infrastructure building. S&P also noted that capital expenditure has been geometrically increasing: $6.9 billion (2024), $21.1 billion (2025) and $55.7 billion (2026). The guidance for fiscal 2027? Between $90 and $95 billion. That is over a 70% increase. Cash flow clearly can’t pay down the debt they already have, a fact that banks factored in to cut off the lending spigot.

Its performance obligations are also crushing. $553 billion has been reported for OpenAI alone [TTA 7 May].  This article reports remaining performance obligations of $638 billion, about half of which is for OpenAI. Despite the disparity in numbers (perhaps completed obligations?), in this analyst’s view, something happens to OpenAI–for instance, a pullback in the confidence of markets to finance their aggressive expansion (and, this Editor would add, an IPO)–Oracle would be hit hard. To paraphrase an overworked analogy, if OpenAI stumbles and sprains its ankle, Oracle would break both legs.

But..but…isn’t demand supposed to be increasing, infinitely?  Increased demand is critical to continued financing. Yet there are leading indicators that demand is leveling off. Corporations are increasingly limiting internal use of AI by employees to tamp down soaring token usage costs and control budgets. These companies have also found that AI tools often do not work as well in replacing humans as they were cracked up to be. And now seemingly every software offering is ‘powered by AI’. The newness is wearing off.

The chip cycle is speeding up–not good news for AI infrastructure builders.  Nvidia is now in full production of its Vera Rubin chip, which is dramatically faster than the previous generation Blackwell chip. Our March reporting picked up that Oracle had forward commitments with Nvidia to use the older Blackwell chip for the OpenAI data centers, and OpenAI wasn’t happy about that. It’s not a simple matter of going to Nvidia and returning old chips and getting new ones–that isn’t done. Vera Rubin is also twice as expensive on a per-rack basis than Blackwell–$7.8 million versus $4 million. Add to this the long taffy pull of building (online is 12-18 months minimum), power, water, and labor costs…it adds up, as any builder will tell you.

Given the above factors, it shouldn’t be any surprise that Oracle stock is down 30% since last December and continues to decline.

Extra: The article also contains a short history of financial cycles. There are parallels drawn comparing the AI boom we are in to similar technology-driven boom and bust cycles, dating back to the building of canals in the 1700s, railways in the 1800s, and electrification in the early 1900s.  

Editor’s note: Any analysis of Oracle’s financial health is based on this article, previous articles, multiple sources, and Oracle’s disclosures. Our interest is primarily in the well-being of Oracle Health and the markets it serves. We do not engage in stock picking and none of the above should be construed as financial advice.

Chutes & Ladders: Done Global principals sentenced on Adderall fraud, Oracle E-Biz Suite hacked, OpenAI’s 5% offer to US government, Meta considers cloud AI, Pearl’s $110M raise

One big years-long chute for Done Global’s Ruthia He and David Brody. The convicted former founder/CEO and clinical president were sentenced to substantial Federal prison terms this past Tuesday. Ms. He will be facing six years in prison, followed by three years of supervised release, and a fine of $1 million. Dr. Brody was sentenced to two years imprisonment, three years of supervised release, and a fine of $1 million. In addition, there will be restitution to fraud victims.

To be announced at a later date: when sentences will start and where they will be served, based on recommendations from the Bureau of Prisons.

While Done Global is effectively ‘done’, the company also does business under the name Mindful Health.

The points of the (at least) $100 million fraud were based on the illegal telehealth prescription of Adderall and other Schedule II stimulants such as Vyvance. Medications on Schedule II have accepted medical uses but carry high potential for abuse and psychological or physical dependence and thus are controlled:

  • A scheme that used the Done Global technology platform, compensation structure, and clinical protocols to unlawfully distribute over 37 million pills of Adderall, defraud insurers of over $12 million, and obstruct the federal investigation that followed.
  • The defendant (He) spent over $40 million on social media advertisements to deceive Americans into believing they had attention deficit hyperactivity disorder (ADHD), falsely diagnosing patients with ADHD, and distributing Adderall, including to patients who the company was warned were suffering from Adderall psychosis, bipolar, depression, anxiety, and other mental health conditions that were worsened by stimulant prescriptions. 
  • These were designed to boost the Done Global valuation to above $1 billion.

From the detailed Department of Justice press release: “The defendants refused to hire or fired Done clinicians who did not participate in the conspiracy, while paying up to $60,000 per month to clinicians who signed Adderall prescriptions every 30 seconds. The defendants also used an “auto-refill” platform technology feature after an initial diagnosis to minimize follow-up appointments, where prescribers signed prescriptions for Adderall based on an automatically generated message that a patient desired a refill. Because of these policies, some patients went years without seeing clinicians, who continually authorized refills even through involuntary psychiatric holds or after the patients had died.”

Dr. Brody alone personally wrote prescriptions for 394,324 Schedule II stimulant pills prescribed to 6,559 Done members. He never evaluated them nor reviewed a single patient record. Part of the case was Done’s record of misdiagnosis, over-prescribing, and patient death.

Additional charges against Ms. He included diversion of company assets and operations abroad. As indictments neared in 2023/2024, they both deleted records, instructed employees to delete  incriminatory documents and messages from the company servers, and transferred communications to platforms such as WhatsApp and Signal using disappearing message settings to conceal sensitive information.

After completion of her sentence, it is likely that Ms. He will be deported to her home country of China. She attempted to flee to Hong Kong in February 2023 and was forced to surrender her passport. Despite this, she made a second attempt after obtaining Chinese travel documents, then was arrested and detained before trial as a flight risk. Two other factors were that she transferred $4.6 million in ad-related revenue to China and set up a shell company there. 

The Drug Enforcement Administration (DEA), HHS-Office of Inspector General, IRS Criminal Investigations, and the Centers for Medicare and Medicare Services (CMS) investigated as violations included financial diversion, record falsification, drug prescribing and Medicare/Medicaid fraud. The main DOJ units involved were the National Fraud Enforcement Division and the Health Care Fraud Unit.

The case was heard in the Federal Northern District of California by Judge Charles Breyer. Dr. Brody plans to appeal and significantly apologized for his actions. KQED and Behavioral Health Business.

Background on the indictment and conviction, TTA 24 January and prior as noted in the article. There is no additional information to date on the grand jury charges from December 2025 of the Done and Mindful companies. 

Editor’s POV: Done wasn’t the first–the far larger Cerebral was in 2022. While it is still in business, Cerebral has spent much of its time and fisc in litigation and settlements. Neither will be the last.  DOJ and Federal agencies are cracking down hard on waste, fraud, and abuse in healthcare; major targets of DOJ/HHS/DEA scrutiny are telementalhealth and substance use disorder (SUD) management, including prescribing and payments. More to come.

Another chute for Oracle, leading to the Hacking trap door. The vulnerability is within Oracle’s E-Business Suite (EBS) and affects the file transmission component of Oracle Payments payments. The flaw has been tracked as CVE-2026-46817 and carries a severity rating of 9.8 out of 10. 900 systems may be exposed, though Oracle flagged it in their May patch updates. The US National Vulnerability Database states that the vulnerability can be exploited remotely over HTTP without authentication. Oracle software seems to be a favorite target of hackers. Cybersec organizations Defused and Shadowserver, along with the US Cybersecurity and Infrastructure Security Agency (CISA) have flagged multiple software vulnerabilities across Oracle’s EBS, WebLogic Server, and PeopleSoft.  Computing UK

Is it a Chute or Ladder? Or Run For Your Life? OpenAI and Sam Altman made headlines before the July 4 celebrations with an offer of a 5% share of the company to the US Federal Government. Both OpenAI and Anthropic are imminent IPOs. The Financial Times report is based upon “early conversations” cited from two insiders. A 5% share, based on current valuations, is about $42.6 billion. It is not only a nice chunk of change in the public fisc but also a clever PR move that may help neutralize public blowback and downright hostility towards unwanted technology; sprawling, noisy, spewing, heat pooling and energy-greedy data centers; AI job displacement; companies discovering that AI is draining them dry without ROI; environmental and community groups; unions, local governments, and more. How it will mollify people who are angry about any of the previous is doubtful. Nor will it please those aligned with socialist Senator Bernie Sanders, who is demanding close to half of OpenAI’s and Anthropic’s value to be held in a sovereign wealth fund.

Whether Anthropic and the hyperscalers building like mad such as Oracle, Meta, Microsoft and others would follow Altman’s lead is debatable. The Computing UK take on this is that it is a cynical and obvious bribe, perhaps one worthy of a Marie Antoinette (who may never have said ‘let them eat cake’…but nevermind). The accountant or computing side of this Editor’s brain flags that neither OpenAI nor Anthropic are remotely profitable. Oracle as a hyperscaler has already fallen into a debt canyon from where it may not emerge. Likely, Oracle is not the only one either, if you isolate AI from hyperscalers’ other sustaining businesses.

A generous offer or a Trojan Horse? You pick….

In this Editor’s view, it satisfies no one, solves no real problems, puts power in exactly the wrong hands, and creates a major conflict of interest in the objective and responsible development of AI.

In the Ladder department, Meta is talking up selling its excess AI cloud computing capacity, thus creating a new revenue stream. If this Editor is not mistaken, it’s similar to the Amazon Web Services model. A second stream would be renting out its AI application programming interface (API) to developers. The charge will be based on usage. That assumes that Meta is envisioning a time that they will have that excess capacity to sell. Right now, there is a dearth of actual, online data centers and a shortage of capacity [TTA 14 May].  Computing UK

A $110 million split raise for Pearl Health rounds it out. The Medicare value-based care management services organization (MSO) and population health services for providers gained a $50 million Series C equity investment from Andreessen Horowitz with participation from Viking Global Investors, AlleyCorp, and Ulysses Capital, plus a $60 million debt facility led by Trinity Capital. The new funds will be used for developing their AI platform, turning clinical intelligence into measurable outcomes, growing health system and payer partnerships, expansion into Medicare Advantage, and new risk offerings. Pearl’s funding to date is $205 million since 2020. It claims that it reached profitability last year and will triple its patient base from 2024 to the end of this year. It currently serves 10,000 providers across 40 states, with more than 250,000 Medicare beneficiaries, in CMS ACO models such as the Medicare Shared Savings Program (MSSP) and ACO REACH ending this year. The shrinking list of competitors in this space include Aledade and Astrana Health (which bought one of the pioneers, Collaborative Health Systems).  Release, MedCityNews

Breaking: Anthropic files confidential S-1 with SEC for IPO, less than one week after $65B raise. But is this Peak AI?

It’s raining mega-IPOs. One week after Oura’s filing a confidential S-1 with the Securities and Exchange Commission for its IPO, massively bigger Anthropic, the developer of Claude AI, has done the same. As with Oura, neither share price nor number of shares has been disclosed in this preliminary filing. Anthropic release

The S-1 filing comes on top of their 28 May announcement of a $65 billion Series H funding led by Altimeter Capital, Dragoneer, Greenoaks, and Sequoia Capital. The valuation of $965 billion makes Anthropic the most valuable AI company on Planet Earth and perhaps the entire Solar System, surpassing OpenAI by about $113 billion. Anthropic’s valuation in February was $380 billion with their Series G raise, so the Series H valuation multiplied that by a stunning 2.5 times+ in three months. The new funds will be used for AI research, expanding its computing power for Claude, and scaling its products and partnerships.  CNBC, Mobihealthnews, Anthropic release

Anthropic’s over-the-top valuation was boosted by its projected annual revenue run of $50 billion, tipping into profitability this quarter, beating its own growth metrics regularly, and introducing new Claude products such as Claude Opus 4.8 and Claude Mythos Preview with advanced cybersecurity available to a limited group of companies. Anthropic in January rolled out Claude for Healthcare for providers and consumers. Claude pulled in front in corporate sales, ahead of OpenAI, as of April, and last month inked a new partnership with Bristol Myers Squibb to implement Claude throughout the company.

But are we at Peak AI? Axios, never one to shy away from Cold Buckets of Water when it makes for a good lede, has been trumpeting for the past week that companies are suddenly shying away from their “discovery” of soaring AI costs. Suddenly, ballooning IT costs, uncertain productivity gains, and a strange combination of employee overuse and sudden skepticism are causes for concern. An AI consultant told Axios that employees blew through half a billion dollars in a single month because they didn’t put usage limits on Claude licenses. Then the CEO of an AI software company, CloudBees, admitted that companies are using workforce cuts to offset their soaring AI costs. This has to be one of the worst-kept secrets in corporate America. Even a casual peruser of LinkedIn would have known this a year ago.

Corporate adoption in Axios‘ view is running into four expensive headwinds such as:

  • Using AI to automate disliked tasks rather than prioritizing revenue-generating tasks–which is understandable without guidance and pressure on time.
  • Using AI for trivial tasks such as checking the weather (well, no one said they couldn’t)
  • Leadership is clueless on what AI tools work and are throwing licenses at the employee wall to see what sticks.
  • Reluctance to give AI models proprietary information, which makes the AI tool less effective. (Not feeding AI models proprietary information to prevent it from becoming public in LLM models is, one would believe, an understandable concern.)

Even OpenAI’s Sam Altman commented when Anthropic’s Series H was announced that corporate costs are the most valid concern to date.

Unless there is a massive enterprise pullback in AI spend, though, look to Anthropic floating that IPO no later than the fall, even if corporate AI spend pulls back. It’s to be expected. The Gartner Hype Curve is fully in gear and the momentum from Inflated Expectations to the Trough of Disillusionment will continue, until it is processed and moves on to the Slope of Enlightenment.

A Must-Read potpourri: the ‘math’ of AI data center builds, healthcare AI failures, telehealth in schools, Hippocratic AI’s problems, the loss of empathy.

Your Editor will be Away From The Desk more than a bit over the next two weeks that lead up to the US Memorial Day holiday. I’ve collected seven articles to read and consider over the next few days. Enjoy!

Where Are All The Data Centers?

Author: Ed Zitron.  Self-published on Where’s Your Ed At?

If you’re puzzled about the ‘math’ of data centers–what capacity is available now, what is actually online/operational, and what’s the pipeline like–you will appreciate the detail that Mr. Zitron has gone to in cataloging those and much more. It turns out that we are not in the Land of Math, but in the Land of Myth, ruled by the Great Oz.

Despite what the builders say, and Microsoft’s and Oracle’s ever-cheery press releases, operational data centers are a fraction of what’s needed now or projected. The centers take 18-24 months to build and then many more months to complete–to fit out with chips, cooling, power, and networking that links sites and the end users. The AI giants, despite all the money flowing their way, will run out of money before the operating capacity they need gets online. Every data center takes 18-24 months to build, and even with retrofitting older data centers, the capacity is not there, nor for some time to come. In other words, the cavalry is in a neighboring country, much less the next state. Nobody has yet built an operating 1 GW data center. Centers are in megawatts and that, not many MWs. 

FTA:

  • “Oracle is building 7.1GW of total capacity for OpenAI, and keeps — laughably! — saying 2027 or 2028, when at this rate, Stargate Abilene won’t be done until mid-2027, and the rest either never get finished or are done in 2030 or later.”
  • “This is setting up a horrifying situation where Oracle desperately needs OpenAI to pay it for capacity that doesn’t exist, and if it ever gets built, it’s likely to be years after OpenAI has run out of money, which is the same problem that Microsoft, Google, and Amazon have with their $748 billion of deals with Anthropic and OpenAI, though thanks to the $340 billion or more necessary to build the Stargate data centers, Oracle’s problems are far more existential.”

The article also makes the point that Oracle does not have the fallback businesses that Microsoft, Google, and Amazon have to cushion the blow of AI failure. Oracle has the bottomless pit of Oracle Health, only one part of which is the VA EHR. It has a crushing burden of a massive debt load, the most recent being financed by a large bond fund since banks wouldn’t touch it. It kicked 30,000 employees and their expertise  to the curb. Will Larry Ellison sell a yacht or an island to help finance this as a 40% owner? More in Oracle Steps Back From The Debt Brink and Oracle’s Rock and Hard Place in Abilene

This is one long, well-written, and researched analysis by Mr. Zitron, whose expertise is in PR and is a well-known Silicon Valley critic. 

Telehealth in Schools: Expanding Student Access in a Hybrid Health Care System

Author: Paul Samargedlis. Published on Telehealth.org

Healthcare shortages across the US are affecting K-12 schools and children’s health. School-based telehealth programs can reduce absenteeism, expand access to mental health care, and deliver preventive care, bringing that care to where children already are. School-based telehealth programs in states such as Texas and North Carolina have demonstrated measurable improvements in attendance and emergency department utilization. Much will have to change in coordinating efforts and obtaining funding among school systems, local providers, and governments.

Artificial Intelligence Acquisitions: Agencies Should Collect and Apply Lessons Learned to Improve Future Procurements

Author: Government Accountability Office (GAO) Report to Congressional Requesters. April 2026 (49 pages)

Federal agencies reportedly more than doubled their use of artificial intelligence (AI) from 2023 to 2024, and they used a range of approaches to acquire additional AI capabilities through fiscal year 2025. In April 2025, the Office of Management and Budget (OMB) issued guidance to help agencies acquire AI responsibly, but agencies have not by and large shared that knowledge. This paper attempts to fill this gap in part. GAO identified trade-offs, challenges and benefits. The paper identifies approaches agencies made in acquisition and makes recommendations. The recommendations most impact DOW, DHS, GSA, and the VA.

Top AI Failures in Healthcare

Author: Dmitrii Gorbunov. Published on LinkedIn.

Mr. Gorbunov sums up five costly failures (or about to be failures) where AI has been used in healthcare: physician decision overrides (UnitedHealthcare), claims denials (Cigna), fabrications of consent documents (Sharp Healthcare), and adding diagnostic codes without physician confirmation (Kaiser Permanente). The fifth one, Doctronic, was spoofed by Mindguard to issue triple the dose of Oxycontin [TTA 26 Mar]. The lack of rules, audit and audit trails that can be confirmed and trusted will cost healthcare organizations money and already are having legal consequences.

The next may require subscription to view on Substack

The Architecture of Voice: Why AI Tools Can Mimic Style But Not The Voice

Stuart Miller (Haverin Consulting)’s fourth article on AI’s effect on language and writing. An AI LLM can partly fill two parts of the Competence Framework–Skills and Knowledge–but it does not have Experience. It is incomplete in these three points of Context, and Voice represents the accumulation of Context. FTA: “The dangerous part is the assumption that accelerated Knowledge substitutes for Experience, when in fact accelerated Knowledge, and improved Skills untethered from time, is precisely the recipe for the Builder’s Mirage. The Builder’s Mirage is the illusion of competence, produced without the underlying thing being present.”

Sergei Polevikov’s Substack under AI Health Uncut will require subscription to fully view. His latest are:

Hippocratic AI Fires Its International Sales Team

It’s turning into Theranos 2.0. FTA: “Revenue is an estimated $17–20M ARR. Burn rate is $404M.” Their customers are also their investors. and “Hippocratic AI has quietly withdrawn from all of its international markets, terminated every international contract, and let go of the international sales team that built those relationships.” Contracts were sold without country language versions, adequate GPU infrastructure, and compliance.

Christina Farr: “Where is all of our empathy? Where did it go?”

Christina Farr is the former CNBC healthcare tech reporter, founder of  Second Opinion Media, and is a funder/advisor in the field. The article is derived from his and Alex Koshykov’s interview for their podcast Digital Health Inside Out (48 minutes, go to YouTube, no paywall). “A no-holds-barred conversation about what’s broken in healthcare media, what’s about to break in digital health, and why she’s not coming back to journalism.”

Until next week….

Two weekend ‘must reads’: the New Yorker’s Sam Altman/OpenAI exposé–and comments; a further deep dive into Carbon Health’s implosion

Too long to summarize or opine on this week–but a must for your weekend reading. Grab the cuppa for the talk of AI World–a New Yorker dissection of Sam Altman, the CEO of OpenAI (link below). To say it is an exposé worthy, at first glance, of the Old School (ain’t no school like the Old School–Ed.) on probably the most important company of AD 2026 is to undersell it. It’s a long article and you’ll need at least one break.

OpenAI, founded as a non-profit with integrity at its core to “prioritize the safety of humanity over the company’s success, or even its survival”, recapitalized last year as a for-profit corporation with 26% of the shares owned by the OpenAI Foundation. It is now a trillion-dollar company that had no trouble raising a paltry $122 billion last week [TTA 2 April] though arguments are made that at least some of that money are IOUs or contingent. ChatGPT has become almost generic for AI, like Kleenex has become for tissues. The battles over control and direction of the company are now totally controlled by Sam Altman, whom former colleagues are not shy about pointing out his difficulty with the truth and a pattern of deceit, for instance to his board, to employees, and Microsoft. Yet everyone continues to do business with him. The FOMO Factor is very strong.

Mr. Altman makes extremely broad statements on the future of work (most traditional managerial, healthcare, and IT jobs will be taken over by AI, thus most of us will be unemployed), has easy access to President Donald Trump, as well as other world executives, and may, as the headline barks, control our future. Thus, he is a person of consequence.

My read so far of this is that within OpenAI, there is no one to counterbalance Mr. Altman’s immense ambition, his desire to dominate and win, not only with AI but also over all business and everyday life. These are character issues that also show up in aspects of his personal life, detailed in the article. If past results are predictive of the future, this flaw usually curdles into the desire to control countries and a complete disrespect for the rest of us leading our lives. 

Sam Altman May Control Our Future–Can He Be Trusted?, 

I will offer two LinkedIn comment posts on this article from an AI person I respect, the head of Curiouser.ai, Stephen Klein. Many of his posts on LinkedIn deal with what AI can and cannot do in business. He writes that he is “committed to designing technology that augments people, creates jobs, and elevates humanity. It’s time we all got back to thinking for ourselves.” 7 April, 8 April 

Our second Must Read is from Sergei Polevikov’s AI Health Uncut, a long analysis on the failure of Carbon Health and what it tells us in “this business we have chosen”. “What The Hell Went Wrong?” and its implications need answers–because it’s being repeated again and again. Today’s article (9 April) is Part 1 of 2, sets the stage about the mistakes made (insiders talk) and, with full credit, springboards off Stuart Miller’s (Haverin Consulting) original analysis made at the time of the Chapter 11 reorg. What we called the ‘Ominous Parallels’ was a Must Read here on 12 February.  TTA (as Telecare Aware, our original name) and this article are also mentioned twice (thanks!).

Those who have yet to subscribe for Mr. Polevikov’s analytic, erudite, and revealing (Emperor’s New Clothes!) POVs can read part of this article for free–but seriously, if you’re in this business, the subscription is worth your money. He also podcasts (links are on his Substack, link at lower right sidebar).

An early and scandalous publisher (before he utterly lost it), Matt Drudge, used to say that he ‘went where the stink is’. Mr. Polevikov does the same. The stink is of our broken primary care reimbursement system, the Covid steroids that pumped up the company, flailing management running through money like drugs, and good ideas for patient care buried under incompetence.