Oracle plans to raise $45 billion to $50 billion this year in order to build additional capacity to meet the contracted demand from the company’s largest cloud customers, including Advanced Micro Devices Inc. (AMD), Meta Platforms Inc., Nvidia Corp., OpenAI, TikTok Inc. and xAI Corp. The company plans to do the fundraising through a combination of debt and equity sales to build additional cloud infrastructure capacity.
The announcement about Oracle’s plans comes amid fears over whether such large artificial intelligence investments made by tech giants would pay off. Oracle’s shares have fallen around 50% from its record price on Sept. 10, wiping out roughly $460 billion in market value.
According to data compiled by Bloomberg, Oracle’s cash flow has been pushed to negative because of its efforts to develop AI data centers. It is expected to stay there till 2030.
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“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.
Oracle plans to raise half of the funds through equity-linked linked and common equity issuances, including mandatory convertible preferred securities and through an at-the-market equity program of as much as $20 billion.
John DiFucci, an analyst at Guggenheim said in a January note that issuing equity would help send a message to the market that Oracle is serious about maintaining its investment-grade debt rating. In 2025, the company had borrowed $18 billion in what was one of the year’s largest corporate bond offerings.
Luria added that 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. He also said that issuing equity may also hurt the company’s stock price.
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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, according to Oracle.
Shares fell about 3% in premarket trading on Monday. Oracle’s stock had declined 2.6% to close at $164.58 in New York on Friday.
Earlier last year, reports mentioned Oracle is projecting major growth by 2030. The company says it expects cloud infrastructure revenue to reach $166 billion in fiscal 2030—accounting for nearly 75% of its total sales. However, recent reports claim that apprehension investors have surrounding Oracle now seems to affect its data center projects in addition to its stock prices.
Asset management firm Blue Owl Capital pulled out from Oracle’s $10 billion data center project over unfavorable debt terms, according to the Financial Times as concerns arise about the company’s amount of debt.