S&P Downgrades Oracle to BBB-: One Notch Above Junk Status
S&P downgrades Oracle to BBB – only one notch above junk level
S&P Global has lowered Oracle's credit rating to BBB-, citing massive debt from its $95 billion AI infrastructure push and a critical reliance on OpenAI. This aggressive shift from software to hyperscaler leaves the company with a projected $42 billion deficit and significant exposure if the AI boom stalls.
If OpenAI were unable to meet its payment obligations, Oracle would be left with long-term data center rental agreements that could neither be easily terminated nor transferred to other customers.
- cmiles8
Market signals on an impending AI bust are broader than just Oracle’s woes.
For example, Amazon just had a challenging bond offering where the market is clearly starting to seriously question the ROI on all this money being pumped into AI buildout. That does not bode well at all for AI-only companies without broader cash flow from other businesses. And when the cash dries up this whole thing comes crashing down like a house of cards.
- chasil
And they terminated 30k employees to achieve this?
https://www.forbes.com/sites/jonmarkman/2026/04/06/oracles-m...
- pgn674
Title is inaccurate. They're BBB- now, not BBB.
- dralley
Here's hoping this screws up the collateralization of the Paramount takeover deal, and the whole thing unravels.
- Reptur
This site is shady as hell. You try to decline marketing in their pop-up and it hides maybe a 100 providers and expects you to click each one individually.
- lelanthran
Ed Zitron must be feeling quite validated :-)
- hobonation
Is it me or do none of the AI companies have a "moat" in the Ben Grahmm sense.
I use their services, but I frankly don't care who provides it. I'll chase the chepest/best and have no issue switching from one to another.
The only moat I can see is Microsoft providing its services to companies in its Azure system. Nervous IT departments probably like that it's not leaving their control if Bob in the SAP team spins up some AI crap.
- measurablefunc
What happens when Oracle can't pay the interest on their loans?
- SwellJoe
Good riddance. Maybe if the trash-tier AI plays get knocked out I'll be able to buy memory and GPUs again.
- teepo
S&P Global link: https://www.spglobal.com/ratings/en/regulatory/article/-/vie...