S&P Downgrades Oracle Over OpenAI Dependency
S&P Global has downgraded Oracle’s credit rating by one level to “BBB-”, which is just one notch above junk. Half of Oracle’s $638 billion in debt is tied to OpenAI and data center capex will increase from $60 billion to $95 billion by 2027.
S&P Global has downgraded Oracle’s credit rating by one level to “BBB-”, which is just one notch above junk. This is because half of Oracle’s $638 billion in debt is tied to OpenAI and data center capex will increase from $60 billion to $95 billion by 2027 (and revenue will take a while to come).
OpenAI is the first AI startup to be labeled as a “key credit risk” to an S&P 500 company. Unlike AWS, Google, or Microsoft, Oracle doesn’t have any proprietary workloads that they can run in their data centers when OpenAI leaves, so they’re stuck with hundreds of billions of dollars in data centers that nobody wants.
Source: the-decoder.com
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Author
Evgenii Arsentev
PhD · Chief Executive Officer, digital health
Articles · Latest articles