Oracle, a company long known for its conservative financial strategy, has entered completely uncharted territory and it’s all tied to Sam Altman and the explosive growth of OpenAI. In what analysts describe as the most aggressive spending spree in Oracle’s history, the tech giant has “burned” roughly $10 billion in cash in a single quarter and taken on an extraordinary amount of debt to support its rapidly expanding AI infrastructure.
The stunning $10 billion cash burn stems directly from Oracle’s record-setting capital expenditures. The company is racing to build massive, GPU-rich data centers required to support OpenAI’s next-generation AI models. With demand for high-performance compute skyrocketing, Oracle’s once-steady balance sheet has transformed almost overnight. The company, which historically avoided extreme spending, is now funneling unprecedented amounts of cash into new cloud regions, server clusters, and AI-optimized facilities.
To keep up with this dizzying pace of infrastructure expansion, Oracle has taken on significant new debt, including an $18 billion jumbo bond sale one of the largest in tech industry history. Investors, already anxious about the skyrocketing costs, reacted sharply. Oracle’s stock dropped more than 11% in after-hours trading following a disappointing quarterly report, and the cost of insuring its bonds against default surged to record highs. For a company once viewed as one of the safest in enterprise software, this shift marks a dramatic reversal.
At the center of the upheaval is a monumental AI compute deal between Oracle and OpenAI, reportedly worth $300 billion over five years, tied to the broader Project Stargate initiative. The scale of the contract is unlike anything the cloud industry has seen, giving Oracle a massive revenue backlog but also exposing it to extraordinary risk. Analysts have called the situation “unprecedented single-customer exposure,” as Oracle is now deeply financially intertwined with Sam Altman’s OpenAI.
The challenge? OpenAI itself is burning through enormous capital and is not expected to turn a profit until 2029, raising questions about long-term stability. As a result, investors are increasingly nervous about Oracle’s reliance on one customer and the massive strain of building AI infrastructure at a pace and scale unheard-of in the company’s 47-year history.
Despite the risks, Oracle is betting big that powering the future of AI will pay off. Whether this becomes a visionary move or a historic miscalculation will define the company’s next decade.
