Oracle plans to raise between $45 billion and $50 billion this year through a mix of debt and equity to fund a massive expansion of its cloud infrastructure, highlighting how capital-intensive the AI race has become.
The company said the funding will be used to meet contracted demand from some of its biggest customers, including AMD, Meta, Nvidia, OpenAI, TikTok, and xAI.
The move comes as investors grow increasingly uneasy about whether enormous AI investments across Big Tech will generate meaningful returns. Oracle’s stock is already down about 50% from its September peak, erasing roughly $460 billion in market value.
Building AI data centers has pushed Oracle’s free cash flow into negative territory, where it is expected to remain for the rest of the decade. The company faces tens of billions in future spending commitments, mainly tied to semiconductors and long-term leases.
Oracle plans to raise around half of the funds through equity and equity-linked instruments, including convertible securities and an at-the-market program of up to $20 billion. The remainder is expected to come from a major bond sale in early 2026.
Analysts say issuing equity could help protect Oracle’s investment-grade credit rating, but both debt and equity routes carry risks. Heavy borrowing may test demand in credit markets, while new share issuance could further pressure the stock.
Goldman Sachs will lead the bond offering, while Citigroup will handle the equity components.
A key driver behind Oracle’s expansion is its long-term contract with OpenAI, which has committed to spend roughly $300 billion renting servers. However, OpenAI remains unprofitable, adding to concerns that Oracle’s massive capital spending may take years to pay off.
Analysts noted the unusual timing of the announcement, suggesting the company may be trying to stabilize investor sentiment after months of declining share prices.