Morgan Stanley Warns Oracle Credit Protection Nearing Record High

"A gauge of risk on Oracle debt "reached a three-year high in November," reports Bloomberg.

"And things are only going to get worse in 2026 unless the database giant is able to assuage investor anxiety about a massive artificial intelligence spending spree, according to Morgan Stanley."A funding gap, swelling balance sheet and obsolescence risk are just some of the hazards Oracle is facing, according to Lindsay Tyler and David Hamburger, credit analysts at the brokerage.

The cost of insuring Oracle's debt against default over the next five years rose to 1.25 percentage point a year on Tuesday, according to ICE Data Services. The price on the five-year credit default swaps is at risk of toppling a record set in 2008 as concerns over the company's borrowing binge to finance its AI ambitions continue to spur heavy hedging by banks and investors, they warned in a note Wednesday. The CDS could break through 1.5 percentage point in the near term and could approach 2 percentage points if communication around its financing strategy remains limited as the new year progresses, the analysts wrote. Oracle CDS hit a record 1.98 percentage point in 2008, ICE Data Services shows...

"Over the past two months, it has become more apparent that reported construction loans in the works, for sites where Oracle is the future tenant, may be an even greater driver of hedging of late and going forward," wrote the analysts... Concerns have also started to weigh on Oracle's stock, which the analysts said may incentivize management to outline a financing plan on the upcoming earnings call..."
Source: https://developers.slashdot.org/sto...-oracle-credit-protection-nearing-record-high

The Oracle that bought TikTok because they wanted to control the narrative? Let them sit on a lemon and twist.

I really like that they have Oracle XE that is free and very reasonable on the hardware restrictions, but man if you wanted to actually purchase a SQL product for the next “tier” it’s like $75,000. They need to open up to the consumer.

erek said:

"A gauge of risk on Oracle debt "reached a three-year high in November," reports Bloomberg.

"And things are only going to get worse in 2026 unless the database giant is able to assuage investor anxiety about a massive artificial intelligence spending spree, according to Morgan Stanley."A funding gap, swelling balance sheet and obsolescence risk are just some of the hazards Oracle is facing, according to Lindsay Tyler and David Hamburger, credit analysts at the brokerage.

The cost of insuring Oracle's debt against default over the next five years rose to 1.25 percentage point a year on Tuesday, according to ICE Data Services. The price on the five-year credit default swaps is at risk of toppling a record set in 2008 as concerns over the company's borrowing binge to finance its AI ambitions continue to spur heavy hedging by banks and investors, they warned in a note Wednesday. The CDS could break through 1.5 percentage point in the near term and could approach 2 percentage points if communication around its financing strategy remains limited as the new year progresses, the analysts wrote. Oracle CDS hit a record 1.98 percentage point in 2008, ICE Data Services shows...

"Over the past two months, it has become more apparent that reported construction loans in the works, for sites where Oracle is the future tenant, may be an even greater driver of hedging of late and going forward," wrote the analysts... Concerns have also started to weigh on Oracle's stock, which the analysts said may incentivize management to outline a financing plan on the upcoming earnings call..."
Source: https://developers.slashdot.org/sto...-oracle-credit-protection-nearing-record-high

Click to expand...

Not good news about Oracle for the Wall Street types. I wonder how much Oracle stock price drops in the next few days. Couldn't happen to a nicer bunch of guys,

westrock2000 said:

I really like that they have Oracle XE that is free and very reasonable on the hardware restrictions, but man if you wanted to actually purchase a SQL product for the next “tier” it’s like $75,000. They need to open up to the consumer.

Click to expand...

Consumer isn't going to pay Oracle's consultants to do whatever it is they do, and isn't going to allow license audits to find out how many unlicensed copies of the VirtualBox Extensions and Java JDKs are installed.

So wallstreet finally figured out that Oracle sucks??

Just sit on a troubleshooting call with Oracle for 24 hours.... "OK, so that plan is A will get a report, B will check for errors, C will blah blah blah" Translation: We dunno what the fuck is wrong. It feels just like working with IBM Global Services...

Maybe the product is good its just the support that sucks and is wildly overpriced and underqualified. In any event, I was not impressed. It was due to a hardware failure, and I got that fixed within a few hours. Meanwhile they are spinning tall tales in their troubleshooting call... Me: "These nics have mismatched firmware. 2 different out of date versions. Let me update it" Oracle dipshit: "Well, what will be the impact? Why do we need to do this?"

.....

TD Cowen: US banks retreat from Oracle amid doubts the company can fund OpenAI commitments​

US banks are refusing to lend due to existing OpenAI commitments
January 27, 2026 By Barney Dixon
Oracle’s ability to procure incremental US data center capacity is facing difficulties amid doubts that the company can fund the buildout of OpenAI-linked projects, according to a TD Cowen report

Earlier this month, Oracle was sued by bondholders over accusations that the company concealed how much debt it would need to sell to support the AI buildout for Oracle's $300 billion OpenAI deal.

Late last year, the company denied rumors that its OpenAI data centers were suffering delays.


in its Data Center Channel Checks update, TD Cowen said that Oracle will need to procure around three million GPUs and other IT gear to support its existing agreements, which has raised questions from both equity and debt investors who are doubting the company’s ability to finance the buildout.

The investment firm said this was evidenced by widening of Oracle's CDS spreads and pressure on Oracle's stock and bonds.

TD Cowen calculated that OpenAI has an implied $156bn capex requirement, assuming a conservative $30m per MW in IT fit out cost. Compounding this is OpenAI’s outstanding $1.4 trillion in multi-year commitments. This has led a number of US banks to retreat from Oracle-linked data center projects due to its agreements with OpenAI, the investment firm said, and in instances where US banks are willing to lend, borrowing costs have risen.

Banks in Asia that are looking to gain exposure to the AI sector are still willing to lend to operators undertaking Oracle leases, but the significant reduction in US financing has led to a significant slowdown for Oracle and raised questions over its ability to continue growing its revenue.

The report also noted that a number of Oracle data leases under negotiation have been unable to secure financing, hampering Oracle’s efforts to secure capacity via lease.

TD Cowen said that Oracle is now requiring 40 percent upfront deposits to mitigate the incremental capex requirement for revenue growth and is evaluating other paths to address financing questions.


https://www.datacenterdynamics.com/...ubts-the-company-can-fund-openai-commitments/

Oracle plans thousands of job cuts as data center costs rise, Bloomberg News reports​

By Reuters
March 5, 202611:43 PM GMT+5:30Updated March 6, 2026

Enterprise software company Oracle (ORCL.N), opens new tab is planning thousands of job cuts as it faces a cash crunch from a massive AI data center expansion effort, Bloomberg News reported on Thursday.

The layoffs will impact divisions across Oracle and may be implemented as soon as this month, the Bloomberg report said, citing people familiar with the matter. Some cuts will be aimed at job categories that the company expects will shrink due to AI.

The planned reductions are expected to be ‌wider-reaching than ⁠Oracle's typical rolling job cuts, according to Bloomberg.

This week, Oracle announced internally that it would be reviewing many of the open job listings in its cloud division, effectively slowing down or freezing the hiring process, the report added.

Oracle declined to comment when contacted by Reuters.
The ⁠company had about 162,000 full-time employees as of May 31, 2025, according to its annual filing with the U.S. Securities and Exchange Commission.


https://www.reuters.com/business/or...costs-rise-bloomberg-news-reports-2026-03-05/

Oracle Resets AI Ambitions With Layoffs And Canceled Texas Data Center​

March 09, 2026
Simply Wall St
Reviewed by Bailey Pemberton

• Oracle plans to cut up to 18% of its workforce to reduce costs and redirect cash toward AI infrastructure investments.
• The company and OpenAI have canceled a major planned AI data center expansion in Texas, with other potential tenants, including Meta, reportedly interested in the site.
• These moves reflect a shift in Oracle’s AI build out, as it reassesses capital needs and operational priorities for its cloud business.

https://simplywall.st/stocks/us/sof...i-ambitions-with-layoffs-and-canceled-texas-d

Marees said:

OpenAI's [expansion plans for] massive Stargate data center canceled as firm can't reach terms with Oracle, operator struggles with reliability issues — Meta said to be interested in snatching excess capacity​

News
By Anton Shilov published 3 hours ago
Too much ado, or Stargate has problems?

Oracle and OpenAI have cancelled plans to expand their flagship AI data center campus in Abilene, Texas, after lengthy negotiations broke down over financing arrangements and OpenAI's changing capacity projections, reports Bloomberg. The Abilene campus is part of the Stargate project announced at the White House last year, and yet, it seems like it faces slowdowns. Just like other Oracle's data centers meant for OpenAI. Yet, Meta could take the yet-to-be-expanded space.

Despite shelving the expansion of one Stargate project, Oracle's general partnership with OpenAI remains unchanged. In July last year, Oracle agreed to develop 4.5 GW of data center capacity for OpenAI, and that program continues. The companies have also announced projects in other locations, including a site near Detroit owned by Related Digital.

*One gigawatt is comparable to the output of a nuclear reactor and can supply electricity to hundreds of thousands of homes at peak usage.

https://www.tomshardware.com/tech-i...to-be-interested-in-snatching-excess-capacity

Click to expand...

Couldn't happen to a more deserving company. Sadly the ones who always take the brunt of the consequences from the bad decision making are the employees and never the CEO.

Oracle Issues Force Majeure on $18 Billion New Mexico Data Center
Last updated 1 hour ago

The company notified developer STACK Infrastructure about potential payment deferrals if the 2.45-gigawatt site, part of the Stargate AI project with OpenAI, misses its 2028 target amid permitting issues, local pushback, and a stalled gas pipeline.

Oracle insists the project stays on track with over 3,600 workers on site, including 1,000 locals, and promises $4.7 billion in economic gains, while Blue Owl confirms unchanged financial commitments.

Shares dropped over 5% for Oracle and 6% for Bloom Energy, spotlighting power and regulatory strains on AI data centers as some project debt trades below 90 cents on the dollar.

(This story is a summary of posts on X and may evolve over time. Grok can make mistakes, verify its outputs.)


https://x.com/i/trending/2103101607105691955?s=20

the future of Oracle — and Larry Ellison — depends on Sam Altman making or raising $852 billion in 4 years, or the company finding someone else to pay $75bn for AI compute using years-old GPUs.

https://x.com/edzitron/status/2047727112287817740?s=20


Oracle sent a force majeure notice on Project Jupiter, its AI data center in New Mexico built for the $400 billion Stargate deal with OpenAI. The campus needs a 17-mile gas pipeline to power its Bloom Energy fuel cells. New Mexico denied the pipeline permits twice. Oracle wants the right to delay payments if the site misses its 2028 opening. $18 billion in project loans are at 89 to 91 cents on the dollar. ORCL fell 5%.

https://x.com/HedgieMarkets/status/2103144295205147020?s=20