Oracle Announces $20 Billion Fundraising to Expand AI and Cloud Infrastructure
US-based technology giant Oracle has announced plans to raise $20 billion from global investors to finance the rapid expansion of its artificial intelligence (AI) and cloud infrastructure. The massive funding will be generated through the sale of new shares and institutional bonds.
Massive Funding Through Shares and Bonds
According to the company's official filing, Oracle has divided the fundraising into two equal parts: $10 billion through common stock and another $10 billion through senior notes or bonds.
Oracle has decided to sell a total of 86.2 million shares at a fixed price of $116 per share, which is 11.2 percent below its recent closing share price on the stock market. Meanwhile, the bonds will have repayment maturities extending from 2029 to 2046.
Stock Market Decline and Debt Pressure
Following the announcement of this massive fundraising plan, Oracle's share price on the US stock market plunged by as much as 8.8 percent, falling to $119.22. As a result, the company's shares have suffered a cumulative decline of approximately 39 percent so far this year.
According to the filings, despite generating $67.36 billion in revenue in fiscal year 2026, the company's net bonds and other debt have exceeded $125.34 billion. In particular, heavy dependence on high-risk institutional customers such as OpenAI, the creator of ChatGPT, coupled with uncontrolled infrastructure spending, has created some uncertainty among equity investors.
Targets and AI Infrastructure
Oracle said that a portion of the funds raised would be spent on expanding data centre infrastructure, repaying existing debt, paying dividends, and repurchasing its own shares through buybacks.
The technology company has set an ambitious target of increasing its annual revenue to $225 billion by fiscal year 2030. Oracle expects its AI-focused infrastructure capital expenditure to reach its peak in fiscal years 2027 and 2028, while the company anticipates that its free cash flow will return to positive territory in the second half of 2028.
//DBTech/BMT/OR//
