Oracle Plans Massive $50 Billion Capital Raise to Fuel AI and Cloud Expansion
February 2, 2026
Oracle Corporation is preparing a monumental capital raise of up to $50 billion in 2026, a strategic move underscoring the immense financial demands of the artificial intelligence arms race and the escalating competition in cloud infrastructure. The planned funding, split roughly evenly between debt and equity, is aimed at financing a massive expansion of its data center capacity to serve major AI clients, including OpenAI, xAI, Meta, Nvidia, AMD, and TikTok. The scale of the proposed raise highlights the capital-intensive nature of building out the computing infrastructure required for advanced AI. According to a report from The Information, Oracle's capital expenditure reached $12 billion in its latest quarter, predominantly directed toward data centers and equipment. This new financial push follows recent debt offerings, including an $18 billion bond sale and reports of a subsequent $38 billion debt package in late 2025. If the $50 billion plan proceeds, Oracle's total recent funding efforts would approach $106 billion. This aggressive financial strategy comes amid significant investor scrutiny. Bondholders have already filed a lawsuit alleging Oracle concealed the scale of future debt needs related to its AI buildout, particularly a $300 billion agreement with OpenAI. The complainants argue that earlier bond documents did not adequately disclose that additional debt beyond the initial $18 billion would be required, leading to investor losses when later financing plans emerged. Oracle has stated the new capital is not solely for OpenAI but for a broader cloud expansion, though this distinction is unlikely to satisfy ongoing legal challenges. The financial strain and market skepticism are reflected in Oracle's stock performance, with shares reportedly down 50 percent from last year's high, erasing approximately $450 billion in market value. Analyst reports, including one from TD Cowen, speculate that Oracle may need to procure around three million GPUs to fulfill its existing contracts, raising doubts among equity and debt investors about the company's financing capacity. This environment has made some traditional lenders cautious; for instance, financial partner Blue Owl recently opted not to fund a planned $10 billion Oracle data center project in Michigan. In a bid to manage costs and generate an estimated $8 to $10 billion in free cash flow, Oracle is also reportedly evaluating significant workforce reductions of 20,000 to 30,000 employees. This follows smaller-scale layoffs in the hundreds during late 2025. The potential scale of this "reduction in force" signals the intense pressure on cloud providers to balance breakneck infrastructure growth with financial discipline. As CEO Clay Magouyrk noted in December, while external analysts had projected a need for up to $100 billion, Oracle internally expects to require "less, if not substantially less" than that figure to complete its build-out commitments.
Source: datacenterdynamics
