Oracle Corporation has announced a US$45-$50 billion capital raising plan through a combination of debt and equity instruments to support the expansion of its cloud infrastructure.
The Austin-based technology group says half the funds will be generated via equity-linked and common stock issuances, including a $20 billion at-the-market program managed by Citigroup.
The remaining capital requirements are to be met through a single, investment-grade senior unsecured bond offering syndicated by Goldman Sachs.
Funding infrastructure demand
The capital injection is specifically allocated to increase infrastructure capacity for contracted demand from major tech and AI-focused companies such as AMD, Meta, NVIDIA, OpenAI, TikTok, and xAI.
While investors had previously expressed caution regarding speculative capital expenditure, the confirmation of executed contracts offers clearer revenue visibility.
Market caution had persisted regarding concentration risk - with analysts estimating OpenAI represents over half the cloud backlog - alongside concerns regarding the startup’s ability to service the almost trillion-dollar commitments.
The update arrested a sharp decline in the tech giant's share price, with the stock climbing 4% following the announcement.
It follows a period where the stock fell from a peak of $345 in September last year to trade nearly 50% below those highs.
Adding to the technical weakness, which saw the stock breach key moving averages, were reports over the weekend suggesting a planned Nvidia investment in OpenAI had stalled.
Oracle responded on social media, stating the news had "zero impact" on their financial relationship and affirming confidence in the partner's liquidity.
"The Nvdia-OpenAI deal has zero impact on our financial relationship with OpenAI," the post said.
"We remain highly confident in OpenAI's ability to raise funds and meet its commitments."
