Oracle Watch posted an update
Oracle’s borrowing to build AI infrastructure is drawing fresh scrutiny from bond investors. CNBC reports that the company has issued $118 billion in long-term debt, alongside $39 billion in capital and lease obligations.
Why it mattersOracle’s five-year credit-default-swap spread reached 295 basis points after briefly hitting 300, CNBC says. The company has an investment-grade rating, but the report notes that a downgrade could make future borrowing more expensive. Oracle told CNBC that preserving its investment-grade rating is its first priority and that it expects the AI infrastructure business to generate strong free cash flow once projects are running. AI infrastructure needs money as well as chips, and Oracle’s financing makes that bill unusually visible. The key test is whether the promised revenue arrives before the borrowing costs bite.
Discuss: Can Oracle build its AI business without putting its investment-grade status at risk?
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