Oracle to raise $45-50 billion for AI cloud expansion, shares fall

Oracle said it expects to raise roughly $45 billion to $50 billion in calendar 2026 through a mix of equity and debt to finance a major expansion of cloud infrastructure for contracted AI customers. The company framed the move as necessary to build additional capacity to meet demand from premier cloud clients that include Nvidia, Meta, OpenAI, AMD, TikTok and xAI.

The financing program is expected to combine stock sales, equity-linked securities and bond offerings. Livemint, citing Bloomberg, reported that Oracle intends to raise about half of the total through equity-linked and common stock sales, including mandatory convertible preferred securities and an at-the-market equity program valued at up to $20 billion. Market reports also show Oracle has initiated a U.S. dollar bond offering structured in as many as eight tranches with maturities from three to 40 years; preliminary pricing for a 40-year bond suggested a premium of roughly 2.25 percentage points over U.S. Treasuries. Some market headlines cited a $25 billion bond sale tied to AI funding, though that figure appeared in aggregated briefs distinct from the overall $45-50 billion program.

The announcement intensified an already volatile trading backdrop for Oracle. The stock showed mixed early movement, dipping about 3 percent in premarket trading before trading up roughly 2 percent on Monday. Livemint reported shares at $168.60 at 11:29 a.m. EST, up 2.36 percent from the prior close of $164.58, while other market feeds noted larger losses since Oracle’s September peak. The company has shed about half its market value since that September high, a decline various outlets put near $460 billion to $463 billion in erased market capitalization.

Analysts and market professionals gave a cautious reception. Jefferies described the fundraising as a move that “buys time” for Oracle’s AI ambitions but warned it could weigh on margins in the near term and said “free cash flow was unlikely to turn positive until FY29.” Russ Mould, investment director at AJ Bell, cautioned: “The perception is that Oracle's fortunes are now heavily tied to OpenAI and combined with the company's plans to raise up to $50 billion to invest in 2026, nervousness about the situation looks unlikely to go away any time soon.”

The program follows a string of large financings and deals last year, including an $18 billion bond sale in September and a major cloud arrangement with OpenAI. Those commitments coincide with heightened credit scrutiny: Oracle reported a roughly $10 billion cash burn in the first half of the fiscal year, and the company has faced a bondholder lawsuit and elevated credit default swap costs.

Beyond markets, the scale of Oracle’s planned buildout raises broader public interest questions. Rapid expansion of data-center capacity for AI can reshape where computing power is concentrated, which companies control critical model access and how costs are passed on to downstream users, including hospitals and public health researchers increasingly reliant on cloud-based AI tools. Large infrastructure projects also carry local community effects - from jobs and tax revenue to pressure on utilities and environmental health concerns - that put equity and public health considerations at the center of corporate financing decisions.

Oracle said negotiations over certain projects remain on schedule. The financing plan aims to secure capacity for large AI customers, but analysts say it may only temporarily ease concerns as the industry continues its rapid, capital-intensive race to power advanced AI models.