Oracle Downgraded to Near-Junk, Citing $95 Billion OpenAI Risk

S&P Global downgraded Oracle’s credit rating to BBB-. This rating sits just one level above junk status. The agency cited significant financial risks stemming from Oracle’s partnership with OpenAI.

Oracle’s AI business consumes cash faster than expected. S&P projects capital expenditures will reach $95 billion by 2027.

OpenAI accounts for roughly half of Oracle’s contractual obligations. These total obligations currently stand at $638 billion.

S&P warned that an OpenAI failure would leave Oracle with vast, underutilized data center capacity. Oracle faces higher risks than rivals AWS, Google, and Microsoft. These competitors can absorb excess capacity through internal workloads, while Oracle lacks similar internal demand.