Will Oracle Be Left Holding the Bag?

News arrived in early August that S&P Global had downgraded Oracle’s credit rating to BBB−, one notch above junk. A further cut would push the company into speculative-grade territory and could raise its borrowing costs sharply. The pressure comes from Oracle’s debt-funded AI infrastructure build-out and its concentration in a handful of major customers, especially OpenAI. The company had accumulated US$129.5 billion in debt and roughly US$260 billion in future data-centre lease commitments, while forecasting US$95 billion of capital expenditure for FY2027. Stargate and related capacity could become a jewel in the crown, but only if demand remains strong enough to absorb it.

That is a far cry from the optimism that surrounded Oracle’s AI push in 2025. Its shares have since fallen sharply as investors have focused on the debt, lease obligations and customer concentration behind the growth story. Tough days may lie ahead for the LLM infrastructure boom.