AsianFin -- Oracle is negotiating roughly $38 billion in new debt financing with banks to expand datacenter capacity for OpenAI. However, investor concerns about the mounting cost of the artificial intelligence buildout sent Oracle shares lower on Friday following the report.
Credit：Freepik
The Financial Times (FT) first reported the discussions between Oracle and lenders. Oracle shares fell as much as 3.6% during Friday's session before closing down nearly 1.5%, as Wall Street grew increasingly uneasy about the company's escalating debt burden tied to AI infrastructure investments. The financing package, if completed in the coming weeks, would rank among the largest AI-related debt deals to date.
The proposed funding would support projects developed with Vantage Data Centers to build additional sites for OpenAI. This comes as OpenAI's datacenter partners are on track to accumulate nearly $100 billion in borrowing linked to the ChatGPT maker, according to FT analysis. The surge in debt highlights a fundamental tension: OpenAI needs massive computing power to achieve its ambitions, but has largely avoided taking on financial risk itself, instead relying on its ecosystem of partners to shoulder the burden.
Oracle did not respond to requests for comment on the reported financing discussions. The company is scheduled to hold its earnings call on December 15, when investors will likely press for clarity on how Oracle plans to manage funding needs for its expanding datacenter pipeline.
SPV Structure Shields Parent Companies from Direct Risk
The new $38 billion financing package is expected to use special purpose vehicles (SPVs), a structure that has become standard in OpenAI-related datacenter lending. According to people close to the negotiations, Vantage Data Centers is preparing to deploy SPVs for loans backing planned sites in Texas and Wisconsin.
These structures serve to isolate risk from the parent companies. When an SPV borrows to fund construction, lenders typically have no recourse to the investor or developer's main balance sheet if a default occurs. Instead, the lender would take ownership of the land and datacenter itself.
Blue Owl Capital and Crusoe previously established a joint SPV to build OpenAI's first U.S. datacenter in Abilene, Texas. That venture secured approximately $10 billion from JPMorgan, to be repaid through Oracle’s 17-year lease on the facility. Similarly, BlueOwl used a wholly-owned SPV to borrow $18 billion from a consortium of mostly Japanese banks for a second facility in New Mexico, also leased by Oracle for OpenAI.
The SPV approach allows capital to continue flowing into OpenAI's infrastructure expansion while limiting exposure for any single party. If Oracle were to default on lease payments, losses would be contained within the specific project entity rather than threatening the broader financial health of developers or their backers.
Debt Network Approaching $100 Billion Across OpenAI Ecosystem
OpenAI's datacenter partners have already borrowed at least $30 billion to invest in the startup or construct its facilities, according to FT analysis. SoftBank, Oracle and CoreWeave account for this figure. Investment firm BlueOwl Capital and computing infrastructure companies including Crusoe rely on contracts their clients have signed with OpenAI to service approximately $28 billion in additional loans.
With the proposed $38 billion Oracle-Vantage package, total borrowing tied to OpenAI would approach $100 billion. According to a 2024 report by asset manager Janus Henderson, this figure equals the combined net debt of the world's six largest corporate borrowers, including Volkswagen, Toyota, AT&T and Comcast.
The actual debt linked to OpenAI may already be substantially higher. Many partners, including SoftBank and CoreWeave, have raised larger sums this year not explicitly tied to the startup. SoftBank has borrowed roughly $20 billion for AI investments, with OpenAI by far its large target. CoreWeave has secured more than $10 billion to lease datacenter space for contracts with Microsoft, some of which may ultimately serve OpenAI through existing Microsoft agreements.
Oracle's Strategy and OpenAI's Compute Requirements
Oracle has already sold $18 billion in corporate bonds to fund infrastructure commitement to OpenAI. Analysts at KeyBanc Capital Markets project that Larry Ellison′ s technology group may need to borrow $100 billion over the next four years to fulfill its OpenAI contracts in full.
OpenAI executives have acknowledged the strategy of leveraging partners' balance sheets. The San Francisco-based startup, recently valued at $500 billion as the world’s most valuable private company, has minimial debt on its own books. OpenAI secured a $4 billion credit facility from U.S. banks last year but has not drawn on it.
OpenAI has signed contracts worth $1.4 trillion to procure computing power over the next eight years, far exceeding its expected annualized revenue of $20 billion this year. The company said current compute shortage represents the single biggest constraint on its growth. These long-term procurement agreements form the credit basis enabling partners to secure bank financing while allowing OpenAI to expand infrastructure without directly assuming debt obligations.
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