Oracle has announced a bold plan to raise between $45 billion and $50 billion in 2026 to expand its AI data center capabilities, raising eyebrows among investors. The cloud computing giant intends to secure funds through a combination of debt and equity, including the issuance of secured securities and common stock, as well as a bond offering slated for early 2026. This initiative aims to meet the increasing demand for computing resources from major players like OpenAI, Meta, AMD, NVIDIA, xAI, and TikTok.
Investor sentiment towards Oracle has notably soured, particularly as the company has taken on significant debt to finance its data center projects. Following a record high on September 10, 2025, Oracle's stock plummeted by over 50%, resulting in a market capitalization loss exceeding $460 billion.
In a recent update, Oracle revealed that it plans to raise half of the necessary funds through the issuance of securities backed by stock and common shares, alongside a bond offering. In 2025 alone, the company had already raised $18 billion through corporate bonds.
A key concern for investors is Oracle's ability to manage its debt obligations, which seems increasingly tied to the fortunes of OpenAI. The latter has committed to spending $300 billion on Oracle's cloud infrastructure. However, OpenAI continues to face financial challenges, incurring billions in losses each year without a clear long-term profitability plan, raising doubts about its capacity to attract private funding.
This skepticism has led to legal troubles for Oracle, as a group of bondholders filed a lawsuit in January 2025, claiming significant losses due to Oracle's failure to disclose the necessity of additional debt for its data center expansion, estimated at $38 billion.
As Oracle's stock continues to decline, investors have rushed to purchase credit default swaps (CDS), a form of insurance against potential default, resulting in the highest default insurance costs for the company in over five years. This indicates mounting doubts about Oracle's creditworthiness among those with the financial means to support its operations.
Despite these challenges, market experts are less worried about Oracle's infrastructure spending, believing in the viability of its long-term investments regardless of OpenAI's future. Reports suggest that even if OpenAI fails to fulfill its commitments to Oracle, other corporate clients will likely step in to fill the gap. With corporate spending on AI expected to increase, the landscape may shift to make AI more accessible, ultimately benefiting corporate clients and cloud providers alike.
This strategic move by Oracle to bolster its AI infrastructure could reshape the competitive landscape, potentially attracting new investors while forcing rivals to reassess their own funding approaches and market positions.
Informational material. 18+.
