It is hard to see where Mr. Ellison thinks he can find about $40 billion in new financing -- to meet Oracle's commitments to OpenAI, in building and energizing vast data centers, for that company. So the stock has fallen by about 50% in the last year or so.
Here's more than a little bit of why I think that will be so.
[To be clear, I do not foresee any bankruptcy (or business cessations) for Oracle, but I do see it trimming its ambitious plans in the next two years -- causing further stock price erosion in the US.]
. . .Oracle is involved in a planned nearly one-gigawatt data center in Port Washington, Wisconsin, that is expected to help the company fulfill its [~$100 billion] OpenAI contract.
But the Public Service Commission of Wisconsin has declined to loosen financial safeguards designed to prevent residential electricity customers from bearing the costs if a massive data center fails or closes, according to the Financial Times.
Under We Energies' "very large customer" tariff, data center operators with an S&P credit rating below A- must provide collateral covering the power plants and transmission infrastructure constructed to serve them.
Oracle was rated BBB, two notches below the threshold, when the requirements were considered. S&P subsequently downgraded the company to BBB-, leaving it one notch above junk status. . . .
Onward into the warm sunshine -- on a mountain bike. Smile.
नमस्ते
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