Oracle says it plans to raise up to $50 billion in debt and equity this year

Core Viewpoint - Oracle plans to raise between $45 billion and $50 billion by 2026 to expand its cloud infrastructure capacity to meet the demand from major clients [1][2]. Funding Strategy - The company intends to secure approximately half of the required funding through equity-linked and common equity issuances, which will include mandatory convertible preferred securities and a new at-the-market equity program of up to $20 billion [2]. - The remaining half of the funding will be raised by issuing senior unsecured bonds in early 2026 [3]. Client Demand - Oracle's funding initiative is driven by the need to accommodate contracted demand from significant clients such as AMD, Meta, NVIDIA, OpenAI, TikTok, and xAI [2]. Financial Scrutiny - Investors have raised concerns regarding Oracle's AI infrastructure expansion as the company's debt increases and its financial performance becomes more closely linked to OpenAI, which is currently not profitable and has not disclosed its infrastructure financing plans [3]. Legal Issues - Oracle faced a lawsuit in January from bondholders claiming losses due to the company's failure to disclose its need for substantial additional debt to support its AI infrastructure development [4]. - The cost of insuring Oracle's debt against default reached its highest level in at least five years in December [4].