Oracle has announced an $18 billion bond offering to finance the expansion of its cloud infrastructure, including projects in partnership with OpenAI.
💰 Offering Size and Structure
Oracle executed one of the largest corporate bond offerings in 2025, issuing $18 billion across six tranches, including a rare 40-year maturity. Investor demand peaked at nearly $88 billion, allowing Oracle to secure financing at lower yields. Despite strong demand, analysts expressed caution regarding the company’s debt load and the long-term sustainability of such instruments.
🤖 Purpose: AI Infrastructure
The proceeds from the bond issuance will support Oracle’s cloud expansion, particularly in delivering services for OpenAI contracts. These projects involve significant capital expenditures, making debt financing a crucial step for the company.
🏗️ Project Stargate and OpenAI Partnership
Under Project Stargate, a joint initiative with OpenAI and SoftBank, Oracle plans to build large-scale AI infrastructure, including data centers and cloud services. The company has committed to providing essential capacity and services under a $300 billion five-year contract. The project has already attracted U.S. government attention and is expected to become one of the largest AI infrastructure projects in history.
📉 Market Reaction and Outlook
Despite the successful bond issuance, Oracle’s stock showed slight declines due to concerns about its debt load and ambitious investment plans. Analysts warn of potential risks associated with high leverage and long-term uncertainties. Nevertheless, the company continues to push forward, anticipating strong demand for AI services and a strengthened position in the cloud technology market.
