Oracle will likely have to borrow huge sums of money in the coming years to fulfill its agreement with OpenAI. According to estimates by KeyBanc Capital Markets, the American software company will need approximately $100 billion in additional capital over the next four years.
This is according to The Register. The money is needed to build the data centers and infrastructure required for a large-scale cloud contract with OpenAI. On September 11, OpenAI announced that it had signed an unprecedented $300 billion (€256 billion) contract with Oracle for computing power over five years. The deal, with a required capacity of 4.5 gigawatts, is one of the largest cloud contracts ever.
The prospect of this revenue caused Oracle’s stock price to rise sharply earlier this month. During the presentation of its quarterly figures for the first quarter of fiscal year 2026, the company reported that total contract commitments had increased by 359 percent to $455 billion. This figure represents revenue that has already been committed but has not yet been delivered and accounted for.
Despite the enormous contract value, KeyBanc believes that Oracle lacks nearly enough resources to build the necessary infrastructure. At the end of August, the company had $82.2 billion in long-term debt on its balance sheet. Additionally, it issued $18 billion in bonds in September to finance the expansion of its cloud computing capacity. Its cash position was approximately $10 billion, while another $9 billion in debt will mature within twelve months.
Credit rating agencies express concerns
The pressure on cash flow is increasing further due to substantial capital investments. In the first quarter of fiscal 2026, Oracle spent $8.5 billion on capital projects, compared to $2.3 billion a year earlier. As a result, free cash flow fell by 152 percent year-on-year. Credit rating agencies have now expressed concerns about both the size of the debt and the risk that OpenAI will be unable to meet its obligations.
OpenAI itself is also currently raising significant amounts of money to finance its collaboration with Oracle. The company has increased its annual recurring revenue to $10 billion and claims that this figure could rise to $20 billion by 2025. Nevertheless, OpenAI is still in the red and is not expected to generate positive cash flow until the end of this decade.
OpenAI’s payments to Oracle for the infrastructure are set to begin in 2027. This leaves it uncertain whether both parties will be able to realize their financial plans. The next year and a half will be decisive for the success of the contract and whether Oracle can actually realize its ambitious expansion plans.