Big Tech is borrowing heavily to fund AI infrastructure, with Oracle joining Amazon and others as a major debt issuer #
Larry Ellison knows how quickly fortunes can change. In September 2025, the Oracle co-founder briefly overtook Elon Musk as the world's richest person after Oracle shares surged. His fortune jumped by more than $100 billion in a single day. The reversal was just as dramatic.
By July 2026, Forbes ranked Ellison as the world's eighth-richest person after Oracle shares fell sharply. His fortune had dropped by about $125 billion from its June peak, when he briefly ranked No. 2 behind Musk.
The fall in Ellison's wealth is closely tied to the same force that helped drive it higher: artificial intelligence. Oracle has transformed itself from a traditional software company into a major supplier of computing capacity for AI developers. The opportunity is enormous. So is the financial bill.
Oracle Is Spending at Extraordinary Speed #
Oracle's fiscal 2026 figures show the scale of the bet. The company spent $55.7 billion on capital expenditure, compared with $21.2 billion a year earlier. That represents an increase of about 162%.
Free cash flow fell to negative $23.7 billion. That does not mean Oracle is losing money. Revenue rose 17% to $67.4 billion, while net income increased 36% to $17 billion. The pressure comes from how much cash Oracle is consuming to expand its infrastructure.
The company is building vast data centres, buying specialised hardware and taking on long-term facility commitments. Much of that spending comes before the expected revenue arrives.
The Debt Behind the AI Expansion #
Reuters reported on 4 August that Oracle's debt had reached $129.5 billion. The company had also committed to about $260 billion in future data-centre leases. Those commitments stretch years into the future.
Oracle's credit rating has also come under pressure. S&P Global cut its rating to BBB-, leaving the company just one notch above junk status. The downgrade reflected concerns over the scale of its AI infrastructure expansion and the pressure it could place on Oracle's finances.
Big Tech Is Moving Into the Debt Market #
Oracle is not alone. Amazon, Microsoft, Alphabet, and Meta are also spending heavily on AI infrastructure. Nasdaq Global Indexes reported that five major hyperscalers issued about $121 billion of new debt in 2025. The shift shows how borrowing is becoming an increasingly important way to fund AI capital expenditure.
Major technology companies are expected to issue hundreds of billions of dollars in bonds as they finance data centres and related infrastructure. The AI boom is therefore reshaping the bond market as well as the technology sector. The question is no longer simply who will build the most powerful AI systems. It is also who will pay for them.
Oracle Has a Huge Backlog #
Ellison's strategy has one powerful argument behind it: demand. Oracle reported $638 billion in remaining performance obligations at the end of fiscal 2026, up 363% from a year earlier.
The company said much of the increase came from large AI contracts. Customers had prepaid for, or supplied, $75 billion worth of GPUs and other hardware, reducing the amount Oracle would need to finance itself. Oracle has also committed to raising $45 billion to $50 billion during 2026 to expand its cloud infrastructure through debt and equity financing.
The strategy is simple. Build capacity now. Secure customers. Collect revenue over time. The risk is that the spending arrives before the returns.
The OpenAI Risk #
Oracle's exposure to AI demand also creates concentration risk. Its infrastructure expansion is closely connected to major customers, including OpenAI. The company is building capacity based on expectations that AI demand will remain strong for years. If demand continues to rise, Oracle could become one of the biggest beneficiaries of the AI revolution.
If demand slows, the debt payments and long-term lease commitments will remain. Oracle expects fiscal 2027 capital expenditure to reach about $95 billion, signalling another major increase in spending.
For Ellison, the AI bet has already changed Oracle. The company is no longer simply selling database software and cloud services. It is committing tens of billions of dollars to the physical infrastructure needed to power the next generation of computing.
The opportunity is enormous. So is the financial exposure. As Oracle's falling share price has shown, investors are increasingly focused on one question: will the revenue promised by the AI boom arrive quickly enough to justify the debt being accumulated today?
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