Oracle Kicks Off $20 Billion Capital Raise to Fund AI Spending

Oracle Corp. has kicked off an effort to raise $20 billion in debt and equity, just days after unveiling a long-term fundraising plan to finance its artificial intelligence infrastructure spending spree.

The company is selling of US dollar investment-grade bonds and a similar amount in common stock, it said in separate filings. The proceeds will help fund day-to-day operations, which may include capital spending and dividend payments, Oracle said.

Oracle’s stock briefly surged last week, while a measure of its credit risk plunged, after the company committed to limit gross debt growth to $10 billion through fiscal 2030 and projected free cash flow that eased investor concerns about whether its AI investments will pay off.

The firm is selling the debt in six tranches, with maturities ranging from two to 20 years, according to a person familiar with the matter. Initial price talk on the longest tenor is a spread of about 3.6 percentage points above Treasuries, the person added, asking not to be identified because they are not allowed to speak publicly.

BNP Paribas SA is leading the bond offering, while Bank of America Corp. is leading the stock transaction, according to the filings.

The debt offering, just a few days after Microsoft Corp. ended a nearly three-month drought in Big Tech bond issuance in the US market, comes as debt buyers have demanded higher premiums to take on — and paid up to protect themselves against — the risk of firms tied to the AI investment boom.

Oracle has raised billions this year by selling shares in an effort to diversify the pools of capital it tapped to fund massive AI related spending. The race for cash comes against a backdrop where Anthropic PBC is preparing a potentially record-setting initial public offering and in the wake of blockbuster share sales from the likes of Intel Corp., Alphabet Inc. and Meta Platforms Inc.

Meanwhile, Alphabet is selling debt in the euro bond market for the second time this year, offering considerably higher yields than in its sale in May after concerns over the pace of AI spending drove a credit-market selloff.

Companies including Oracle have flooded the market with hundreds of billions of dollars in borrowing to fund new data centers and chip purchases since last year.

See Bloomberg New’s Global AI Infrastructure Debt Monitor