Oracle Raises $20 Billion From Bonds and Shares to Fund Its AI Cloud Build-Out

The company said in an investor release that the total would be split evenly, with $10 billion coming from equity and $10 billion in gross debt. Oracle said the proceeds would go to general corporate purposes, which it listed as capital spending, debt repayment, acquisitions, dividends and share buybacks.

How The Deal Was Priced

Oracle priced 86.2 million shares at $116 each, an 11.2% discount to Friday's closing price, according to Business Standard. The stock had closed down 6.37% on Friday at $130.67, TipRanks reported, and it fell about 4% in premarket trading on Monday. The shares were down roughly 33% this year through Friday.

The debt side changed between filing and pricing. Reuters, in a report carried by The Globe and Mail, said Oracle's initial filing described six tranches maturing between 2029 and 2046, one floating-rate and five fixed-rate. The final offering dropped the floating-rate note and consisted of five fixed-rate tranches with coupons ranging from 7% to 8.65%, according to Business Standard. TipRanks said early price talk on the 20-year bond pointed to a spread of about 3.6 percentage points over US Treasuries.

The coupons show what investors now demand to lend against AI infrastructure. Debt buyers have been asking for higher yields from large technology issuers, TipRanks noted, citing Microsoft's recent $25 billion bond sale. Alphabet sold €6 billion of euro bonds the same day.

A Cap On Future Financing

The sale follows guidance Oracle gave last week to calm concerns about its cash burn. The company said capital spending would peak this fiscal year and next, and pledged to raise no more than $20 billion in additional AI financing through fiscal 2030. According to TipRanks, management expects spending to fall back in fiscal 2029, free cash flow to turn positive in the second half of fiscal 2028, and free cash flow of at least $30 billion in fiscal 2029.

Oracle has also set a target of more than $225 billion in revenue and adjusted earnings above $21 per share in fiscal 2030, which would more than triple its revenue, Reuters reported. Fiscal 2026 revenue was $67.36 billion. Notes payable and other borrowings stood at $125.34 billion as of August 31.

In February, Oracle completed a $25 billion debt deal alongside an earlier $20 billion stock offering, and said at the time that it did not expect to issue more bonds in 2026, according to TipRanks.

Why It Matters

Oracle has become one of the most closely watched AI infrastructure bets because it is building data centre capacity at a scale that its revenue base does not yet match. Reuters noted that investors have focused on its spending because it lacks the revenue scale of cloud rivals Microsoft and Amazon and has significant exposure to OpenAI, which is loss-making.

The equity sale dilutes existing shareholders, and the high coupons add interest costs. The financing cap is meant to show investors that this round of fundraising has a limit. Whether the market accepts it will depend on whether Oracle's contracted AI demand turns into cash on the timetable it has set out.