Oracle stock falls on more debt to fund AI chip buying, OpenAI revenue disclosure

Oracle ( ORCL ) stock fell on Thursday following a Wall Street Journal report detailing how the enterprise cloud provider and other tech companies are preparing to tap debt markets to fund the ongoing AI infrastructure build-out.

Oracle is reportedly in talks with Apollo ( APO ) and Goldman Sachs ( GS ) to arrange financing and wants a deal done as soon as this year. The deal would likely have investors fund a separate company that buys the chips, which Oracle would lease over time to avoid borrowing more money itself. (Disclosure: Yahoo is a portfolio company of funds managed by affiliates of Apollo Global Management.)

Broadcom ( AVGO ) and SpaceX ( SPCX ) were also mentioned by WSJ as pursuing similar deals.

Oracle stock is down nearly 30% this year amid the AI infrastructure build-out. Oracle's capital spending hit $28.5 billion in the June-to-August quarter, up from $2.3 billion in the same quarter two years earlier.

Adding further pressure, OpenAI's ( OPAI.PVT ) annualized revenue is reportedly $20 billion short of prior estimates . OpenAI is one of Oracle's biggest cloud customers: Oracle builds data centers for the AI lab, and the contract backlog stood at $664 billion last quarter.

Much of that has been paid for with bonds: Oracle "has nearly doubled its long-term debt to more than $160 billion over the past two years," Bloomberg reported Saturday , and the company now ranks as the fifth-largest borrower in the US corporate bond market.

Larry Ellison, who owns roughly 40% of Oracle, also backed Paramount's acquisition of Warner Bros. Discovery. That company, Skydance ( SKYD ), took on $52 billion of additional debt last week. David Ellison, Larry's son, is co-CEO of Skydance .

Daniel Howley contributed to this report.

Internal AI tools help analyze data and draft. Editors reviewed, edited, and fact-checked this post before publication.