Oracle and OpenAI Financial Update
Oracle Corporation (NYSE: ORCL) has seen a significant decline in its stock, dropping 11.7% in March and over 54% since mid-September following the announcement of a $300 billion deal with OpenAI. The company’s stock is currently down more than 23% in 2026. Meanwhile, reports indicate that OpenAI plans to spend $600 billion in compute by 2030, a revision from an earlier target of $1.4 trillion, offering some relief to investor concerns.
Financial analysts have raised red flags due to Oracle’s exposure to OpenAI’s cash burn, evident with Oracle’s 5-year credit default swap (CDS) spread rising to 120-150 basis points from under 50 basis points before the deal. In contrast, Alphabet’s CDS stands at approximately 45 basis points, highlighting Oracle’s growing financial strain amid escalating capital commitments.
