Oracle Bonds Drop as $38B AI Debt Plan Raises Investor Risk – Nov 2025

Oracle Corporation’s bonds are under pressure following investor reports that the company plans to take on an additional US$38 billion in debt to finance its expansion into artificial-intelligence infrastructure. This move comes amid growing worry that Oracle is borrowing heavily — even more than its earnings can support — to fund large-scale AI projects and data-centre buildouts.

Currently, Oracle carries roughly US$104 billion in total debt, including around US$18 billion in bonds. Critics note that the company is spending more cash than it generates from operations as it ramps up AI investments, including deals tied to AI firms. In fixed-income markets, this has translated into falling bond prices and rising yields: for instance, some of Oracle’s long-dated bonds have seen yields tick up by several basis points in recent trading.

Analysts suggest the debt-fuelled AI bet raises questions about Oracle’s ability to convert its heavy capital expenditures into sustainable profits. While the company’s AI ambitions are bold, skeptics point out the risk inherent in financing such a capital-intensive strategy through borrowing, especially if AI demand or profitability disappoints.

Analysis / Impact:
Oracle’s bond sell-off sends a strong signal: for many investors, the scale of its AI spending is triggering alarm. Unlike some tech players that may rely on cash flow or equity, Oracle is leaning heavily on debt — raising concerns about long-term credit risk and leverage. If the AI investments do not deliver the anticipated returns, the company could face significant strain servicing its obligations.

The situation also underlines a broader trend in Big Tech, where companies are funding aggressive AI builds with borrowed money. For stakeholders in emerging markets like Nigeria and Africa, it’s a reminder that even giants are not immune to financing risk, especially when scaling up capital-intensive AI infrastructure. For local investors and corporates, the move may be a cautionary tale about balancing growth ambition with financial prudence.