Overview
- Oracle said it will seek $45 billion to $50 billion in 2026 through a roughly even mix of equity and investment‑grade bonds to add cloud capacity for contracted demand from clients including OpenAI, Nvidia, Meta, TikTok, xAI, and AMD.
- Shares swung between losses and gains on Monday as analysts said the plan eases near‑term funding risk but could pressure margins and delay positive free cash flow until around fiscal 2029.
- The fundraising follows a January bondholder lawsuit alleging Oracle failed to disclose additional debt needs tied to a reported $300 billion OpenAI contract that helped drive a spike in its backlog.
- Investor concerns over customer concentration and counterparty risk have intensified across AI infrastructure, with reports that Nvidia’s up‑to‑$100 billion OpenAI investment is being reassessed.
- Microsoft’s recent disclosure of $625 billion in remaining performance obligations, with roughly 45% linked to OpenAI, and its stock selloff have sharpened questions about monetizing massive AI capex.