Key facts
- Oracle founder Larry Ellison has personally guaranteed $40.4 billion for a media deal involving his son David's ambitions.
- A lawsuit has been filed by 12 U.S. state attorneys general to block the proposed merger on antitrust grounds.
- S&P Global downgraded Oracle's credit rating to BBB-, citing concerns over its AI data center expansion and debt.
- Oracle's capital expenditures have significantly increased, with projections of up to $95 billion for the current year.
- The company's stock has fallen approximately 36% year-to-date.
Oracle Corp. is experiencing a significant crisis of confidence, driven by two major financial pressures: founder Larry Ellison's substantial personal financial exposure to a media deal and the company's own aggressive, debt-fueled expansion into artificial intelligence infrastructure.
Ellison has personally guaranteed $40.4 billion of the financing for the Paramount Skydance bid, which aims to acquire Warner Bros. Discovery for approximately $110 billion, advancing his son David's media ambitions. This deal faces a significant legal challenge, with a coalition of 12 U.S. state attorneys general filing an antitrust lawsuit to block the merger. They argue that combining two major Hollywood studios would harm competition.
Concurrently, Oracle itself is undertaking a massive, capital-intensive buildout of AI data centers. The company spent $55.7 billion on capital expenditures in the last fiscal year and anticipates spending as much as $95 billion in the current year. This strategy has led to increased debt, prompting S&P Global Ratings to downgrade Oracle's credit rating to BBB- on July 9, citing weaker-than-expected free cash flow and mounting business risks. The downgrade has tangible consequences, with regulators requiring Oracle to post approximately $7 billion in collateral for a data center project.
The confluence of these factors has severely impacted Oracle's stock. Shares have fallen roughly 36% since the start of the year, and Ellison's personal fortune, largely tied to Oracle stock, has shrunk by an estimated $213 billion since September 2025.