Oracle Corp. plans to raise $45 billion to $50 billion in 2026 through debt and equity offerings to expand cloud capacity, aiming to meet surging artificial intelligence demand from major customers despite investor concerns over costs and returns.
Oracle Targets Massive Capital Raise to Fuel AI Cloud Growth
Oracle said Sunday it will seek one of the largest financings in its history to build additional expand cloud capacity, reflecting the scale of investment required to support artificial intelligence workloads. The company said the funding will support contracted demand from its biggest cloud customers.
Those customers include Advanced Micro Devices Inc., Meta Platforms Inc., Nvidia Corp., OpenAI, TikTok Inc., and xAI Corp., Oracle said in a statement. The company is expanding data centers and related infrastructure to meet long-term commitments already on its books.
The announcement comes as technology companies pour billions of dollars into AI-related projects, raising questions among investors about whether such spending will deliver sustainable returns. Oracle’s shares have fallen about 50% from a record high reached Sept. 10, erasing roughly $460 billion in market value.
Developing AI-focused data centers has pushed Oracle’s free cash flow into negative territory, where it is expected to remain until 2030, according to data compiled by Bloomberg. The company faces tens of billions of dollars in future spending, 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.
Equity and Debt Mix Signals Credit Rating Concerns
Oracle plans to raise about half of the targeted funds through equity-linked and common equity issuances. These include mandatory convertible preferred securities and an at-the-market equity program of up to $20 billion, the company said.
The remaining portion is expected to come from a single bond issuance early in 2026. Oracle borrowed $18 billion in 2025 in one of the largest corporate bond offerings of that year, adding to an already growing debt load.
Issuing equity expand cloud capacity could help reassure investors and credit rating agencies, according to analysts. “Issuing equity would help send a message to the market that Oracle is serious about maintaining its investment-grade debt rating,” John DiFucci, an analyst at Guggenheim, wrote in a January research note.
Still, both financing paths carry risks. Luria said debt investors may be wary of absorbing such a large volume of new investment-grade bonds, given Oracle’s existing commitments and recent trading in credit default swaps. He added that selling equity could further pressure the stock price.
Goldman Sachs Group Inc. will lead the senior unsecured bond offering, while Citigroup Inc. will lead the at-the-market equity program and the mandatory convertible preferred equity issuance, Oracle said.
Investors Weigh Risks as AI Spending Accelerates
Investor anxiety has intensified as Oracle’s debt has climbed alongside broader concerns about a potential AI investment bubble. By December, prices on some credit default swaps tied to Oracle reached their highest levels since the 2008 financial crisis, signaling heightened perceived risk.
A central pillar of Oracle’s Expand cloud capacity strategy is its contract with OpenAI, which has committed to spending about $300 billion to rent servers from Oracle over time. OpenAI is not profitable, adding to concerns about Oracle’s ability to recoup massive capital expenditures without a clear timeline for returns.
The timing of the announcement also drew attention. Releasing such a significant financing plan on a Sunday is unusual for a mature technology company. Luria said the move could be aimed at stabilizing sentiment before markets reopen.
“The timing could be the management team trying to stop the endless slide in the share price by trying to give investors some hope ahead of Monday’s open,” he said.
