tech
December 3, 2025
Oracle hit hard in Wall Street’s tech sell-off over its huge AI bet
Company falls more than rivals over its borrowing and reliance on OpenAI contracts.
TL;DR
- Oracle's stock has fallen 25% in the past month, significantly impacting its market value.
- The company is committing hundreds of billions to AI, largely for OpenAI deals.
- Concerns exist about the capital-intensive nature of AI deals and potential risks if AI startups fail.
- Oracle has increased its long-term debt substantially to fund its AI expansion.
- Credit rating agencies have flagged risks due to Oracle's reliance on a few AI companies, particularly OpenAI.
- Oracle is the only hyperscaler with negative free cash flow.
- The company has significant off-balance-sheet lease commitments for data centers to be used by OpenAI.
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