According to an analysis by TD Cowen, an investment bank under TD Securities, technology giant Oracle is facing severe financial pressure due to financing difficulties for the expansion of artificial intelligence data centers.In response to the predicament, the company is considering large-scale layoffs, which are expected to affect 30,000 people, and may sell part of its business.
The report pointed out that Oracle plans to lay off 20,000 to 30,000 people, which is expected to release 8 billion to 10 billion US dollars in cash flow. At the same time, the company is also evaluating the possibility of selling Cerner, the healthcare software unit it acquired in 2022 for $28.3 billion.
The financial crunch mainly stems from a series of aggressive AI infrastructure investments. Previously, Oracle signed an agreement with OpenAI and planned to build a data center worth up to US$300 billion. TD Cowen estimates that this alone will result in $156 billion in capital expenditures.
also,Oracle has also reached cooperation with Meta, Nvidia and other companies, raising its total data center-related investment plan to US$523 billion, and it is expected to purchase approximately 3 million GPUs.To this end, the company's expected capital expenditures in 2026 have been raised to US$50 billion.
However, financing channels for large-scale expansion are narrowing. The report shows that many U.S. banks have stopped providing loans to Oracle's data center projects. Although the attitude of Asian banks is relatively optimistic, the overall financing environment is full of challenges.
Market doubts are directly reflected in the company's financing costs: in the last few months of last year, the price of Oracle's five-year credit default swaps (CDS) tripled, and its stock and bond prices also continued to be under pressure.
Despite raising $18 billion through a bond issue last September, analysts estimate Oracle still needs to borrow about $25 billion a year to support its expansion plans. The increased difficulty in financing has had a real impact on project progress.
An insider revealed,Completion of some data centers built for OpenAI has been delayed from 2027 to 2028 due to shortages of manpower and materials.
As of the close of trading on January 30, Oracle's stock price fell 2.62% to US$164.58, and the company's market value was approximately US$472.9 billion. The veteran technology company is facing a key financial and strategic test as investors increasingly question its ability to raise capital.
