Moody's warns Oracle of $300 billion AI order risk, maintains its Baa2 rating
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Moody's warns that the $300 billion AI contract signed by Oracle carries multiple risks, but has not adjusted its Baa2 rating. Analysts point out that Oracle's business model relies on commitments from a few AI companies, posing significant counterparty risk. Although Oracle's cloud infrastructure contracts are expected to exceed $500 billion, its debt growth will outpace EBITDA growth, and the net leverage ratio is expected to rise to 4 times, with free cash flow likely remaining negative
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