Oracle’s $50B “All-In” AI Gamble: Wall Street Shudders at Debt and Dilution
Oracle Corp is making moves. They just announced a plan to raise fifty billion dollars by 2026. This money will help Oracle Corp expand its cloud infrastructure fast. The Chairman of Oracle Corp Larry Ellison says they need to do this because a lot of people want to use intelligence.. When Oracle Corp made this announcement, the people who invest in the company were not very excited. The price of Oracle Corp shares went down by four percent when trading started. Investors are thinking about whether it’s a good idea for Oracle Corp to grow so quickly if it means they will owe a lot of money. Oracle Corp is taking a risk with this fifty billion dollar plan.
The company is trying to get money to make Oracle Cloud Infrastructure bigger and better. This is so it can handle big contracts that will last for many years. These contracts are with clients, like OpenAI, Meta, NVIDIA and xAI. The company wants Oracle Cloud Infrastructure to be able to support these clients.
The strategy that is called the “Capex War” is when debt meets equity. This is what happens when a company uses debt and equity together. The “Capex War” strategy is, about using debt and equity to achieve a goal. In this strategy debt and equity meet to make something big happen for the company. The “Capex War” is a way for companies to make investments.
Oracle is trying something with its money. Normally the company borrows a lot of money to finance its operations.. For 2026 Oracle wants to be more careful. It is going to split the $50 billion it needs roughly in half between borrowing money and using equity-linked instruments.
Oracle is also going to sell shares of the company to raise some of this money. It has a $20 billion program that lets it sell these shares a little at a time at the current price. This is called an “, at-the-market” equity program. Oracle can use this program to sell shares at the price people are willing to pay at the time.
The Financial Red Flags:
People are getting really worried about Oracles debt. The cost of protecting Oracles debt, which’s like insurance for the companys loans has gone up a lot. This is the highest it has been since the financial crisis in 2008. It shows that people are very anxious about how much Oracle owes and if they can pay it back. The cost of insuring Oracles debt is a concern because it means people think Oracle might have trouble paying its loans. This is making people nervous, about Oracles situation.
The “OpenAI Risk” is a concern, for people who watch Oracle. They think Oracle is taking a chance with OpenAI. OpenAI is not making money yet. Some people are worried that Oracle is spending too much money on things they need to work with OpenAI. These people think OpenAI might have trouble getting the money they need.
Reported Layoffs: Rumors of 20,000 to 30,000 job cuts are circulating, suggesting Oracle is stripping its “legacy” software and data center teams to redirect every possible dollar toward the high-stakes AI buildout.
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