Lawsuit Alleges Oracle Made Misleading Statements Around Debt Sale for AI Infrastructure

Core Viewpoint - Oracle is facing a class action lawsuit from bondholders who claim the company made misleading statements regarding an $18 billion debt sale, which has led to investor losses due to perceived higher credit risk after Oracle sought additional funding [1][2][3]. Group 1: Lawsuit Details - The lawsuit involves investors who purchased $18 billion in notes and bonds issued by Oracle on September 25, following the announcement of a $300 billion contract with OpenAI [2]. - Investors allege losses occurred when Oracle returned to the capital markets seven weeks later to seek $38 billion in loans for data centers, resulting in falling prices and rising yields [3]. - The lawsuit seeks unspecified damages from Oracle [3]. Group 2: Contract with OpenAI - Oracle's $300 billion agreement with OpenAI is noted as one of the largest technology contracts on record, requiring 4.5 billion gigawatts of electricity, equivalent to the consumption of 4 million U.S. homes [4]. - This deal enhances Oracle's position in the competitive cloud market and aligns the company with a prominent player in artificial intelligence [5]. - The contract exemplifies how the AI sector is being financed through borrowing, as companies invest in data centers and technology for large language models [6]. Group 3: Data Center Expansion - Oracle is constructing a new data center in Michigan as part of its commitment to the OpenAI contract, which is one of 64 new data centers being built [6][7]. - These new facilities will complement the 147 data centers already operated by Oracle globally [7].