Oracle plans to raise up to $50 billion in 2026 for cloud buildup

By Brody Ford and Se Young Lee

 

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.  

 

Oracle 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. 

 

The announcement coincides with persistent fears about whether massive artificial intelligence-linked investments by tech companies such as Oracle will pay off. The company’s shares have fallen around 50% from its record price on Sept. 10, wiping out roughly $460 billion in market value. 

 

 

Developing AI data centers has pushed Oracle’s free cash flow negative, where it is expected to stay until 2030, according to data compiled by Bloomberg. The company is on the hook for tens for billions of dollars in spending in the coming years, largely on semiconductors and 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.

 

The company plans to raise half of the funds via equity-linked and common equity issuances, including mandatory convertible preferred securities and through an at-the-market equity program of as much as $20 billion. 

 

Issuing equity would help send a message to the market that Oracle is serious about maintaining its investment-grade debt rating, wrote John DiFucci, an analyst at Guggenheim, in a January note.

 

The rest of its funding target would be raised via a single issuance of bonds early in 2026. The company borrowed $18 billion in 2025 in what was one of the year’s largest corporate bond offerings. 

 

But the debt market may not have an appetite for this much investment-grade debt from Oracle given its existing commitments and trading in its credit default swaps, Luria said. Issuing equity may also hurt the company’s stock price, he said.

 

Goldman Sachs Group Inc. will be leading the senior unsecured bond offering, and Citigroup Inc. will be leading the at-the-market issuance and mandatory convertible preferred equity offering, Oracle said.

 

As Oracle debt swelled and Wall Street raised concerns of an artificial intelligence bubble, investors rushed to buy credit default swaps tied to Oracle, which by December pushed the prices on some of the derivatives to the highest since the 2008 financial crisis.

 

A key part of Oracle’s cloud investment is its contract with OpenAI, which has committed to spending about $300 billion to rent servers from Oracle. OpenAI is not profitable, adding to worries about the financial strains from huge capital expenditures without a clear timeline for meaningful returns. 

 

Making this significant of an announcement on a Sunday afternoon is unusual for a mature company like Oracle. 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,” Luria said.