Cloud business investment cannot stop! Oracle will raise $50 billion this year

Oracle plans to raise up to $50 billion through bond and equity financing by 2026 to expand its cloud infrastructure to meet the demands of large customers. This aggressive financing plan comes at a time when the veteran software company is facing serious doubts from the market regarding its debt burden and heavy asset transformation strategy. On February 2, Bloomberg reported that Oracle stated on February 1 that the funds raised are intended to "build additional capacity to meet contractual demands from its largest Oracle Cloud Infrastructure customers," which include AMD, Meta, NVIDIA, OpenAI, TikTok, and xAI. The company plans to raise about half of the funds through equity-related instruments and common stock issuance, including mandatory convertible preferred securities and a market equity program of up to $20 billion. Analysts point out that this financing plan highlights Oracle's aggressive stance in the AI cloud services race, but also intensifies investor concerns about its financial sustainability. According to Bloomberg data, Oracle currently carries approximately $95 billion in outstanding debt, making it one of the largest corporate bond issuers outside the financial sector. According to a previous article from Wall Street Insight, well-known short seller and the prototype for "The Big Short," Michael Burry, recently disclosed that he has shorted Oracle, criticizing its "unnecessary heavy asset expansion" and fragile financial structure, calling it a "pure AI bubble vehicle." Details of the $50 Billion Financing Plan According to media reports, Oracle plans to complete this large-scale fundraising through diversified financing channels. The company will raise approximately $22.5 billion to $25 billion through equity-related instruments and common stock issuance, specifically including mandatory convertible preferred securities and a market equity program (at-the-market equity program) of up to $20 billion. The remaining funds will be raised through the bond market. Oracle stated that it plans to conduct a single bond issuance in early 2026, with a scale of approximately $22.5 billion to $25 billion. This will further increase the company's already substantial debt burden. The company emphasized in its statement that these funds will be specifically used to expand cloud infrastructure capacity to fulfill contracts signed with large customers. The list of customers cited by Oracle includes key players in the AI industry, from chip manufacturers AMD and NVIDIA to AI application developers OpenAI and xAI, as well as major internet platforms Meta and TikTok. Short Sellers Previously Criticized "Dislike Its Positioning and Financing" Oracle's aggressive financing plan was launched against a backdrop of widespread concern over its debt levels. According to Bloomberg data, the company currently has approximately $95 billion in outstanding debt, making it one of the largest corporate bond issuers in the Bloomberg high-rated index outside the financial sector. Reports indicate that this level of debt reflects Oracle's aggressive investment strategy in recent years as it transitions from a traditional database software vendor to a cloud infrastructure provider. **To compete with Amazon AWS and Microsoft Azure, the company has invested billions of dollars in purchasing NVIDIA chips and building data centers, shifting from a "light asset" model to a "heavy asset" model ** At the same time, this transformation has led to a continuous rise in capital expenditures. The market's doubts about certain cloud trading structures and debt expansion are weakening investor confidence. According to a previous article mentioned by Wall Street Watch, Michael Burry believes that Oracle is engaging in unnecessary heavy asset expansion, attempting to compete with cloud giants through expensive data center construction. The core of Burry's short-selling logic is that Oracle lacks the safety cushion of other tech giants and is a fragile "pure AI bubble carrier." He points out that companies like Microsoft, Alphabet, and Meta have strong core business moats that allow them to survive even if AI investments fail. In contrast, Oracle's current stock price support logic heavily relies on the single narrative of "surging demand for AI cloud services." Burry believes that Oracle is undergoing a high-risk transformation while carrying massive debt, and once AI demand falls short of expectations, its margin for error is extremely low. He stated that giants like Microsoft and Google have the ability to control spending over time and absorb losses from excess capacity, but Oracle faces greater financial structural vulnerabilities