Oracle faces AI boom risk from OpenAI dependence and $300 billion commitment

  • Sebastian Mallaby warned Oracle could face trouble if OpenAI encounters financial difficulties.
  • S&P Global rated Oracle BBB-, while estimating half of $638 billion in future revenue involves OpenAI.
  • OpenAI agreed to purchase roughly $300 billion of Oracle computing capacity over five years starting in 2027.

Oracle’s growing reliance on debt and OpenAI could expose it to stress if the artificial-intelligence investment boom falters, Council on Foreign Relations senior fellow Sebastian Mallaby said. S&P Global cut Oracle’s rating to BBB- on July 9, one notch above junk, and estimated that about half of its $638 billion in contracted future revenue is linked to OpenAI. Oracle expects $90 billion to $95 billion in fiscal 2027 capital expenditure and plans to raise another $20 billion through an equity offering this year. OpenAI has agreed to purchase about $300 billion of Oracle computing capacity over five years from 2027, exceeding its current reported annualized revenue of around $40 billion. OpenAI CEO Sam Altman remains confident in using the capacity profitably but has criticized parts of the wider buildout as "unsustainable silliness."

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