Shares of Oracle fell around three percent in premarket trading after the company unveiled plans to raise up to $50 billion while analysts flagged potential large-scale workforce reductions.
The technology giant said it intends to generate between $45 billion and $50 billion in gross cash proceeds during 2026 to expand data center capacity for contracted cloud customers.
The capital raise is expected to involve a mix of debt and equity financing as Oracle accelerates its infrastructure buildout to support artificial intelligence workloads.
AI Demand Drives Historic Infrastructure Spending
Hyperscalers and cloud providers have rushed to secure computing capacity as artificial intelligence demand fuels record investment across global data center projects.
Industry data shows data center deals reached $61 billion in 2025 as major technology firms committed enormous sums to secure long-term computing resources.
Oracle’s customer roster for this expansion includes Nvidia, Meta, OpenAI, AMD, TikTok and xAI, underscoring the scale of demand it is attempting to satisfy.
Layoff Speculation Adds To Investor Concern
A note from TD Cowen suggested Oracle could be considering layoffs of between 20,000 and 30,000 employees to unlock an estimated $8 billion to $10 billion in free cash flow.
The report said workforce reductions were one of several strategic options under consideration alongside asset divestitures and vendor financing arrangements.
Oracle did not immediately respond to requests for comment as investors weighed the implications of both aggressive fundraising and potential job cuts.
Debt, Dilution And Investor Anxiety
Oracle previously raised $18 billion in a bond sale in September and signed a $300 billion agreement with OpenAI as part of its AI infrastructure strategy.
The company’s stock has fallen roughly fifty percent since its September peak and dropped eleven percent in December after slightly missing revenue expectations.
Michael Field, chief equity strategist at Morningstar, said, “We’re entering the end-game for AI exposed stocks, it’s do or die and what we’re seeing is many firms, like Oracle and Microsoft go all-in on the technology.”
He added, “The problem for Oracle is that it’s diluting the holding of existing shareholders and taking more debt to fuel this investment, hence the dismay by investors.”
Earnings Season Highlights AI Investment Risks
Concerns over AI spending have surfaced elsewhere after Microsoft shares fell ten percent following softer than expected Azure growth despite long-term optimism from analysts.
Meta shares, by contrast, jumped eight percent on the same day after reporting significant AI-related investment that impressed investors.
Oracle’s situation highlights the binary nature of massive AI bets where success could transform earnings potential while failure risks heavy balance sheet strain.
