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Oracle Launches a $20 Billion Capital Raise to Fund Its AI Spending
IA en un minuto newsroom · Editor: Jon Elgezabal
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Oracle has started a $20 billion placement, split almost evenly between investment-grade debt and common stock, to sustain its spending on artificial intelligence. According to Bloomberg, the debt will come in six tranches that mature in three to 20 years, with Bank of America at the helm. Oracle plans it days after setting a $10 billion ceiling on how much its gross debt can grow.
Oracle has started an operation to gather $20 billion to pay for its spending on artificial intelligence infrastructure, according to Bloomberg, as carried by Yahoo Finance.
The company will place $10 billion in investment-grade bonds and a comparable amount in common stock, according to two separate filings. Oracle says it will put the money toward its regular operations, which can include capital investment and dividend payments.
The bonds will be spread over six tranches maturing in three to 20 years, according to someone with knowledge of the deal. The filings name Bank of America as lead on both the bond and stock sales.
The issue comes a few days after Oracle unveiled a long-term financing plan in which it pledged that its gross debt will rise by no more than $10 billion through fiscal year 2030. Bloomberg says that since last year companies like Oracle have put out hundreds of billions of dollars of debt to build data centers and buy chips, and investors want more return for the risk of the AI boom.
Why it matters · analysis and opinion
What stands out is not only the figure but the mix: Oracle does not rely on debt alone, and instead splits the operation between bonds and stock, which suggests it wants to avoid putting the whole weight on its balance sheet, something consistent with the cap it set days earlier. Bloomberg also describes a market where investors demand more return for the risk of the AI boom, so financing data centers and chips is no longer cheap even for the big tech companies. For anyone who depends on the cloud of these providers, it is a signal to watch, although the news does not say whether the cost of that capital will reach the prices or terms of the services.
Source: Yahoo Finance · Written with the help of AI: how we make the news
