Oracle Issues $20B in Bonds and Stock Weeks After Promising to Limit Borrowing

Oracle has announced its intention to raise $20 billion in a single offering — $10 billion through bonds and another $10 billion via common stock issuance. The company revealed this in investor notices published on Monday, October 27, 2026, according to The Register. Notably, just a week prior, Oracle publicly promised investors it would cap total new borrowing at $20 billion through the end of fiscal 2030, stating it planned to secure those funds by the end of fiscal 2027. Thus, the actual volume of planned borrowing matched the previously announced ceiling, but the pace of the offering turned out to be significantly more aggressive than analysts anticipated.

The Week Between the Promise and the Offering

The timeline of events makes the situation particularly revealing for the market. Last week, in conversations with investors, Oracle set an upper borrowing limit of $20 billion through the end of fiscal 2030 while also promising to boost revenue by charging extra for AI features beyond the standard per-user seat fee. In the same communication, the company clarified to analysts that it expected to raise the entire $20 billion by the end of fiscal 2027, meaning no additional borrowing was anticipated over the following two years. Just a week later, investor notices provided specific details: $10 billion in bonds and $10 billion in stock. While formally the limit was not breached, compressing the issuance timeframe from two years down to a few weeks signals that capital needs were much more urgent than suggested during the initial announcement.

Where the $20B Will Go: Datacenter Capital Expenditures

In its investor notices, Oracle lists the permissible uses for the raised funds: working capital, capital expenditures, contract performance, dividend payouts, share buybacks, debt repayment, and other corporate purposes. According to The Register, a significant portion of the funds will be directed toward funding datacenter construction. The scale of the company's capital expenditures supports this hypothesis: in the fiscal year ending May 2026, Oracle's capital expenditures totaled $55.7 billion, and for fiscal 2027 the company is budgeting $90–95 billion. This represents an increase in infrastructure spending of more than 50% in a single year, which cannot be covered solely by operating revenue.

Borrowing Strategy and the Bet on AI Revenue

Alongside the bond and equity offering announcement, Oracle confirmed it has no intention of using other structured finance forms or alternative credit-raising instruments in the market. The company also noted that in July 2026, costs to secure power supply obligations could exceed $100 million annually. These obligations relate to the construction of an approximately 1 GW datacenter in Wisconsin, carried out in partnership with Vantage and OpenAI. Consequently, Oracle is simultaneously piling on debt and locking in long-term energy commitments, intensifying its reliance on steady cash flows from AI contracts.

Projects and Risks: From Wisconsin to New Mexico

Additional context is provided by the situation surrounding the Project Jupiter campus in New Mexico. Reports indicate that in October, Oracle sent a force majeure notice to Blue Owl Capital, the subsidiary constructing the facility. The reported goal was to secure payment deferrals if the campus is not commissioned on schedule, without exiting the project. Oracle itself maintains that construction is proceeding on schedule. The discrepancy between the company's public stance and the nature of the notice sent suggests that internal risks of schedule delays are likely viewed more conservatively than what is being communicated to the external market.

Context: $455B RPO and the OpenAI Deal

The financial scale of Oracle's current operations cannot be separated from the sharp increase in the company's valuation that occurred in September 2025. At that time, Oracle announced a guaranteed future revenue backlog under RPO (remaining performance obligations) of $455 billion. Of this amount, $300 billion stems from agreements with OpenAI, primarily for leasing datacenter capacity for AI workloads. This very contract forms the foundation for justifying massive borrowing to investors: the company is building out infrastructure for already signed commitments rather than hypothetical demand. Nevertheless, revenue concentration in a single counterparty and dependency on facility commissioning timelines remain key risks that the market will monitor when evaluating the new bond issuance.