Oracle has said it expects to raise between $45 billion and $50 billion in 2026 to expand capacity for its cloud infrastructure, signalling one of its largest capital-raising efforts as demand for artificial intelligence and cloud services accelerates.
The software company said the funds would be split roughly evenly between equity and debt, reflecting an effort to finance rapid expansion while preserving its investment-grade credit rating.
The announcement comes amid growing scrutiny of Oracle’s debt levels and its increasing reliance on a handful of large customers, particularly OpenAI.
Balanced mix of equity and debt
Oracle said it plans to raise around half of the funds through equity-linked and common equity issuances, including mandatory convertible preferred securities and a new at-the-market equity programme of up to $20 billion.
The remaining capital would be raised through senior unsecured bonds, which the company plans to issue early in 2026.
“Oracle is raising money in order to build additional capacity to meet the contracted demand from our largest Oracle Cloud Infrastructure customers, including AMD, Meta, NVIDIA, OpenAI, TikTok, xAI and others”, the company said in a statement.
“This funding plan reflects Oracle’s commitment to maintaining an investment-grade rating, prudent capital allocation, balance-sheet strength and transparency with investors as the company continues to expand its Oracle Cloud Infrastructure business,” it said.
Investor concerns over debt and exposure
Oracle, long viewed as a smaller cloud player compared with Amazon, Microsoft and Google, has faced criticism over the scale of its debt-fuelled expansion and the perceived concentration risk of relying heavily on a single customer.
Investors have increasingly questioned Oracle’s aggressive spending on AI infrastructure, particularly as its debt rises and its fortunes become more closely tied to OpenAI, which is not profitable and has yet to detail how it plans to finance its own infrastructure expansion.
Oracle is seen as being “way too exposed and levered to OpenAI, but in the worst way,” Mizuho trading-desk analyst Jordan Klein wrote in a note to clients late last month.
He said Oracle’s exposure is tilted toward OpenAI’s training operations, while the more attractive growth opportunity lies in inference—the stage where AI models generate predictions using new data.
Bondholders have sued Oracle
Last month, bondholders led by the Ohio Carpenters’ Pension Plan filed a lawsuit alleging that Oracle failed to disclose the extent of additional debt required to support its AI build-out.
The proposed class action was filed on behalf of investors who purchased $18 billion in Oracle notes and bonds issued in September, following a $300 billion contract with OpenAI.
The plaintiffs said they were surprised when Oracle returned to capital markets just seven weeks later to secure $38 billion in loans for data centre construction tied to the OpenAI deal.
Concerns over Oracle’s financial trajectory have also been reflected in credit markets.
The cost of insuring Oracle’s debt against default rose sharply in December to its highest level in at least five years.
Analysts see equity issuance as a positive
Analysts have argued that issuing equity could help reassure the market that Oracle is serious about maintaining its credit profile.
John DiFucci of Guggenheim said in a January note that equity issuance would send a clear signal of the company’s commitment to preserving its investment-grade rating.
Others see the funding plan as a step toward restoring confidence.
Siti Panigrahi of Mizuho said the announcement could reassure investors who had been seeking clarity on Oracle’s financing strategy.
“In our recent investor conversations, several investors highlighted the need for greater clarity on Oracle’s funding strategy and explicitly noted that an equity component would help restore confidence despite modest dilution,” he wrote.
The “balanced” plan released on Sunday “reduces uncertainty” and also could “reduce fears of over-reliance on debt financing,” Panigrahi said.
Gil Luria of DA Davidson & Co said that successfully executing the capital raise would mark an important turning point for Oracle, helping it address the financial pressures created by its ambitious expansion.
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