Oracle seeks $40bn for AI data centre expansion as capex climbs

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Oracle $40bn for ai data centre

Highlights

Oracle targets $40bn in new funding for AI data centre expansion, with fiscal 2027 capex set to reach $55.7bn, exceeding the prior $50bn guidance.
Oracle's shares fell over 7% after earnings, as investors question the balance of surging construction costs and returns on large AI projects amid $25bn in recent debt issuance.
Oracle faces execution and credit risks, including project delays and local opposition, with $638bn in performance obligations and over 30,000 job cuts to support AI investment.

Funding plan and spending outlook

As reported by Financial Times, Oracle says it expects to raise $20bn in fiscal year 2027 and draw another $20bn through a previously announced equity issuance to support its data centre build-out.

The database group says capital expenditure, largely tied to AI data centres, reaches $16.5bn in the quarter and brings full-year spending to $55.7bn, above its earlier $50bn guidance. Oracle also keeps its sales forecast for the next fiscal year flat at about the $90bn level it guided in March.

The spending drive follows Oracle's late-2025 agreement with OpenAI to provide data centre capacity under a $300bn contract. That commitment includes financing upfront construction costs and adds to the company's funding needs as it expands AI infrastructure.

Investor reaction and pressure on execution

Oracle shares fall more than 7% in after-hours trading after the earnings report before trimming losses later. The reaction comes even though fourth-quarter revenue of $19.2bn and full-year revenue of $67.4bn both top expectations.

Investors remain focused on whether Oracle can balance rising construction costs with returns on large AI projects, while preserving its investment-grade credit rating after raising billions in debt, including $25bn in February. The company is also facing local resistance in places such as Saline Township, Michigan, where project delays have added to execution risk.

Market scrutiny is also centering on Oracle's reliance on a limited number of major customers to support large lease commitments and debt repayment capacity. The company says it has about $638bn in remaining performance obligations, while it has also cut more than 30,000 jobs in the past quarter to reduce costs and free cash for AI investments.

Our earlier coverage of Washington’s proposed equity discussions with leading AI companies outlined how policymakers are considering mechanisms for AI developers to “give back” to the public, potentially via government stakes. We noted that the debate is intensifying as firms such as OpenAI and Anthropic prepare for major public-market moves, while public concerns grow over AI’s impact on jobs and how the industry’s gains should be shared.

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