Oracle Shares Fall 5% as OpenAI Revenue Figures Are Clarified
Oracle shares fell on Thursday as investors weighed OpenAI’s lower-than-reported annualized revenue and plans by technology companies to borrow for AI…
Oracle stock fell on Thursday as investors reacted to new details about OpenAI’s revenue and reports that technology companies are preparing to borrow to fund artificial intelligence infrastructure. The concerns matter to Oracle because OpenAI is one of its biggest cloud customers, and Oracle is spending heavily to build data centers and expand computing capacity.
Oracle shares dropped 5% in Thursday trading, according to Yahoo Finance. CNBC reported that the company’s shares fell nearly 6% that day, alongside declines in other AI-related stocks, after OpenAI’s revenue figures were clarified.
OpenAI told investors it had roughly $50 billion in annualized revenue at the end of September, CNBC reported, citing a person familiar with the matter. That was below the $68 billion figure widely reported late last month. The source said that earlier figure included gross revenue from OpenAI’s partners.
The distinction weighed on AI shares. Nvidia fell 3% on Thursday, while CoreWeave slipped nearly 8%, CNBC reported. Investors are closely watching whether the spending behind AI services can be supported by the revenue companies generate.
Oracle’s spending has risen sharply as it builds infrastructure for AI customers. Capital spending reached $28.5 billion in the June-to-August quarter, compared with $2.3 billion in the same quarter two years earlier, Yahoo Finance reported. Oracle stock is down nearly 30% this year, according to the report.
The scale of that investment also raises questions about how Oracle will pay for new capacity. The Wall Street Journal reported that Oracle and other technology companies are preparing to tap debt markets to fund the AI infrastructure build-out.
Yahoo Finance reported that Oracle is in talks with Apollo and Goldman Sachs about financing and wants a deal completed as soon as this year. Under a possible arrangement, investors would fund a separate company to buy chips, which Oracle would then lease over time. That structure could help Oracle avoid borrowing more directly, though the talks remain reported discussions rather than a completed deal.
Broadcom and SpaceX were also mentioned by The Wall Street Journal as pursuing similar deals, Yahoo Finance reported. The financing approach reflects the large upfront costs involved in buying the chips needed for AI computing.
Debt is already a major part of Oracle’s funding picture. Bloomberg reported that Oracle “has nearly doubled its long-term debt to more than $160 billion over the past two years,” according to Yahoo Finance. The company now ranks as the fifth-largest borrower in the US corporate bond market, the report said.
For Oracle’s customers and investors, the stakes extend beyond one day’s share-price move. OpenAI’s revenue figures are relevant because the company relies on Oracle’s cloud services, while Oracle’s infrastructure investment and debt levels shape how it funds future capacity. The contract backlog stood at $664 billion last quarter, Yahoo Finance reported, but the disclosed revenue gap has sharpened scrutiny of demand expectations.
CNBC also reported that OpenAI’s investor presentation cited 77% total run rate growth in its third quarter and 107% growth for its enterprise business during the same period. The source familiar with the presentation said the company shared the financial update with investors.
Yahoo Finance also reported that Oracle co-founder Larry Ellison owns roughly 40% of the company and backed Paramount’s acquisition of Warner Bros. Discovery. Skydance, the company involved in that deal, took on $52 billion of additional debt last week, the report said. David Ellison, Larry Ellison’s son, is Skydance’s co-CEO.
Oracle’s reported financing talks now sit alongside the company’s continuing infrastructure spending and the revised OpenAI revenue figure. Yahoo Finance reported that Oracle wants a financing deal done as soon as this year.
Source: finance.yahoo.com
