Oracle’s AI-Driven Debt Expansion Sparks Market Concerns

Oracle shares plummeted 5% as investors scrutinize the sustainability of its $300 billion AI partnership with OpenAI. The sell-off erases last month's 36% rally—the stock's strongest single-day gain since 1992—and positions November as potentially the worst month since 2011 for Oracle shareholders.

Market skepticism centers on OpenAI's five-year commitment to pay Oracle $60 billion annually for cloud infrastructure. Analysts question whether the AI sector overextended itself during this year's frenzy, with KeyBanc's Jackson Ader noting waning sentiment. Oracle trails major cloud peers in free cash FLOW while aggressively expanding data centers and GPU purchases.

The company plans to raise $38 billion in new debt, pushing total obligations to $96 billion. These funds will finance data center construction in Texas, New Mexico, and Wisconsin, alongside bulk orders of Nvidia and AMD chips. Debt markets now test whether AI ambitions can outpace financial realities.