Oracle (ORCL.US) announced on Sunday its plan to raise $45 to $50 billion through a combination of debt and equity offerings by 2026, aimed at expanding additional capacity for its cloud infrastructure. The company stated in a release, "This financing is intended to build more capacity to meet the committed demand from our largest Oracle Cloud Infrastructure (OCI) customers, which include companies such as AMD, Meta, NVIDIA, OpenAI, TikTok, and xAI." It is understood that Oracle plans to raise approximately half of the funds through the issuance of equity-linked securities and common stock, including mandatory convertible preferred securities, and via an "at-the-market" (ATM) equity program of up to $20 billion. Oracle also stated it plans to raise the remaining required funds through a one-time bond issuance in early 2026. The company had previously borrowed $18 billion in 2025, marking one of the largest corporate debt issuances of that year. A key component of Oracle's cloud investment is its contract with OpenAI. Under this agreement, OpenAI has committed to spending approximately $300 billion to rent servers from Oracle. Given that OpenAI is not currently profitable, this has intensified market concerns about the financial strain of massive capital expenditures without a clear timeline for returns. This announcement comes as investors grow increasingly worried about whether the massive, AI-related investments by tech companies, including Oracle, will ultimately yield returns. Affected by such concerns, Oracle's stock price has plummeted more than 50% since hitting a record high on September 10, erasing over $460 billion in market capitalization. The rapid decline in Oracle's share price is further amplified by investor apprehension regarding the AI outlook. Currently, some of the world's largest tech companies are still committing tens of billions of dollars in capital expenditure to build data centers, yet in some cases, they have not provided a clear path to return on investment. Furthermore, the "circular transactions" between OpenAI—a private company that is not yet profitable—and companies like Oracle and NVIDIA have made the market more vigilant. Eric Diton, President and Managing Director of Wealth Alliance, commented, "There are some assumptions embedded here, like how much OpenAI will actually spend, where that money is coming from, and whether these things will actually happen. Perhaps Oracle's stock had run way ahead of the fundamentals, and now the market is saying, okay, show me the results, I want to see real delivery." Notably, recent reports citing investment bank TD Cowen, part of TD Securities, indicate that Oracle is facing severe funding difficulties due to challenges in financing its AI data center expansion and is considering measures such as large-scale layoffs and the sale of parts of its business to cope. A TD Cowen research report suggests Oracle plans to lay off 20,000 to 30,000 employees, a move expected to free up $8 to $10 billion in cash flow. Not only that, Oracle is also considering the sale of its healthcare software unit Cerner, which it acquired for $28.3 billion in 2022. TD Cowen estimates that Oracle will bear $156 billion in capital expenditures related to its agreement with OpenAI (to build data centers valued at $300 billion), leading to a $15 billion upward revision of its projected 2026 capital expenditure to $50 billion. Beyond building data centers for OpenAI, Oracle has also reached agreements with Meta and NVIDIA. The company's total investment scale for data centers is as high as $523 billion, requiring the procurement of approximately 3 million GPUs alone. TD Cowen pointed out that currently, several US banks have stopped providing loans for Oracle-related data center projects. The institution added that while Asian banks appear more optimistic about Oracle, the stance of US banks raises doubts about whether Oracle can secure support from other major banks. TD Cowen warned that both equity and debt investors have questioned Oracle's ability to fund this expansion project this year, as evidenced by the widening of Oracle's credit default swap (CDS) spreads and the pressure on its stock and bond prices.