Oracle Corporation plans to raise between $45 billion and $50 billion this year through a mix of debt and equity sales to finance a massive expansion of its cloud infrastructure, underscoring the scale of investment required to support the rapid growth of artificial intelligence.
The company said in a statement on Sunday that the capital raise is intended to fund additional capacity needed to meet contracted demand from its largest cloud customers, which include Advanced Micro Devices, Meta Platforms, Nvidia, OpenAI, TikTok, and xAI.
The announcement comes amid growing investor anxiety over whether the huge sums being poured into AI-related infrastructure by major technology firms will ultimately deliver sufficient returns.
Mounting Pressure on Oracle Shares
Oracle’s stock has fallen by about 50% from its record high on September 10, erasing roughly $460 billion in market value, according to data compiled by Bloomberg.
The company’s aggressive push into AI data centre development has pushed its free cash flow into negative territory, where it is expected to remain until at least 2030. Oracle faces tens of billions of dollars in future spending commitments, largely tied to semiconductors and long-term leases.
“If Oracle can complete the raise successfully it will start digging itself out of the considerable hole it has found itself in,” said Gil Luria, an analyst at DA Davidson & Co.
How Oracle Plans to Raise the Funds
Oracle said it intends to raise about half of the targeted funding through equity-linked and common equity issuances, including:
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Mandatory convertible preferred securities
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An at-the-market equity programme of up to $20 billion
Issuing equity would help reassure investors that Oracle remains committed to preserving its investment-grade credit rating, according to John DiFucci, an analyst at Guggenheim, who noted this strategy in a January research note.
The remaining portion of the funding is expected to come from a single bond issuance in early 2026. Oracle raised $18 billion in 2025 in one of the largest corporate bond offerings of that year.
However, analysts warn that investor appetite for additional Oracle debt may be limited.
“The debt market may not have an appetite for this much investment-grade debt from Oracle given its existing commitments and the trading in its credit default swaps,” Luria said, adding that issuing more equity could also put further pressure on the company’s share price.
Banks, AI Risks and Investor Concerns
Goldman Sachs Group will lead the senior unsecured bond offering, while Citigroup will oversee the at-the-market equity issuance and mandatory convertible preferred equity offering, Oracle said.
Investor unease has already been reflected in derivatives markets. As Oracle’s debt load expanded and Wall Street debated the risk of an AI investment bubble, demand for credit default swaps linked to Oracle surged, pushing prices on some contracts to their highest levels since the 2008 financial crisis.
A central pillar of Oracle’s cloud strategy is its contract with OpenAI, which has committed to spending about $300 billion to rent servers from Oracle. OpenAI is not currently profitable, adding to concerns about the financial strain of massive capital expenditures without a clear timeline for meaningful returns.
