Oracle to raise up to $50 billion in debt and equity this year

"Oracle Corp. plans to raise $45 billion to $50 billion this year through a combination of debt and equity sales to build additional cloud infrastructure capacity, reflecting the scale of financing needed to feed AI's growth. The company is raising money to build additional capacity to meet the contracted demand from the company's largest cloud customers, including Advanced Micro Devices Inc., Meta Platforms Inc., Nvidia Corp., OpenAI, TikTok Inc. and xAI Corp., the company said in a statement Sunday."

"On Monday, it kicked off a US dollar bond offering that is expected to be about $20 billion to $25 billion, according to people with knowledge of the matter, who asked not to be identified because they're not authorized to speak publicly. The announcement and bond sale coincide with persistent fears about whether massive artificial intelligence-linked investments by tech companies such as Oracle will pay off."

"Oracle's plans to raise as much as $50 billion this year may not be a panacea for all long-term financing and return on investment concerns, wrote Bloomberg Intelligence analysts Robert Schiffman and Alex Reid in a note on Monday, but they highlight management's commitment to high grade ratings by utilizing a considerable amount of equity to meet its needs. Oracle shares rose by as much as 4% after markets opened in New York on Monday."

Oracle plans to raise $45–$50 billion this year via debt and equity to expand cloud infrastructure for major AI customers such as AMD, Meta, Nvidia, OpenAI, TikTok and xAI. The company launched a US dollar bond offering expected to total about $20–$25 billion. Persistent market concerns exist about whether large AI investments will yield returns, and Oracle's stock has fallen roughly 50% from its September peak, erasing about $460 billion in market value. Analysts say the raise may not resolve all long-term financing or ROI issues but shows management's willingness to use equity to preserve high-grade ratings. Developing AI data centers has driven free cash flow negative until 2030, and the company faces tens of billions in semiconductor and lease spending.

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