🏦 S&P just put Oracle one notch above junk, and OpenAI is the swing factor.
On July 9, S&P cut Oracle to BBB- from BBB. The agency said Oracle's AI buildout is much more capital intensive than expected and named OpenAI as a key credit risk.
The important nuance: this is not about receivables. S&P estimates OpenAI makes up roughly half of Oracle's $638 billion in remaining performance obligations, meaning contracted future revenue. Oracle's own filings also show $261 billion of additional data center lease commitments as of Feb. 28, 2026, generally 15 to 19 year terms.
That is the squeeze. Oracle is locking in 15 to 19 year costs while the headline OpenAI cloud deal is reported at about $300 billion over roughly five years. OpenAI is still private, has no public credit rating, and was still losing billions as of its last reported numbers.
Sources:
spglobal.com/ratings/en/regula…
... Show more...🏦 S&P just put Oracle one notch above junk, and OpenAI is the swing factor.
On July 9, S&P cut Oracle to BBB- from BBB. The agency said Oracle's AI buildout is much more capital intensive than expected and named OpenAI as a key credit risk.
The important nuance: this is not about receivables. S&P estimates OpenAI makes up roughly half of Oracle's $638 billion in remaining performance obligations, meaning contracted future revenue. Oracle's own filings also show $261 billion of additional data center lease commitments as of Feb. 28, 2026, generally 15 to 19 year terms.
That is the squeeze. Oracle is locking in 15 to 19 year costs while the headline OpenAI cloud deal is reported at about $300 billion over roughly five years. OpenAI is still private, has no public credit rating, and was still losing billions as of its last reported numbers.
Sources:
spglobal.com/ratings/en/regula…
sec.gov/Archives/edgar/data/13…
wsj.com/business/openai-oracle…
cnbc.com/2025/06/09/openai-hit…
#AI #Oracle #Finance
OpenAI is now generating $10 billion in annual recurring revenue, according to a company spokesperson.
Ashley Capoot (CNBC)
Aaron O
in reply to jcrabapple • • •👀
IYKYK