Oracle Corporation (ORCL.US) $18 Billion AI Loan Sells at a Discount and Stalls, Pressure Emerges in the AI Financing Chain

Oracle Corporation (ORCL.US) New Mexico Project Jupiter data center's approximately $18 billion syndicated loan distribution has stalled, with bank quotes having dropped to 89 to 91 cents on the dollar, corresponding to a loan market value of approximately $16 billion to $16.4 billion. Oracle Corporation's stock price bucked the trend overnight, falling 2%, with recent performance significantly weaker than the overall AI sector. This loan was provided by a bank syndicate at the end of last year to initiate the construction of Project Jupiter. The project belongs to the "Stargate" initiativea $500 billion AI infrastructure project jointly led by OpenAI, SoftBank, and Oracle Corporation, aiming to build AI computing infrastructure on a large scale across the United States. Market concerns over Oracle Corporation's continued borrowing and weakening credit condition are intensifying. In July of this year, S&P downgraded Oracle Corporation's corporate credit rating, which is now only one notch above junk level. Banks' efforts to sell this loan to a broader group of investors have stalled. According to the Financial Times, banks have been forced to retain Oracle Corporation-related debt exposure on their own balance sheets beyond original plans. Cash Flow Pressure Emerges for AI Giants It's not just Oracle Corporation. According to the Financial Times, OpenAI disclosed in an internal presentation in July of this year that it expects cumulative negative free cash flow of $278 billion between 2026 and 2030. Although its revenue is projected to grow from $36 billion in 2026 to $350 billion in 2030, the massive investment in computing power will far exceed the scale of revenue. According to The Wall Street Journal on the 18th, Anthropic plans to postpone its IPO to November of this year, previously expected by the market to be a record-scale initial public offering in October. People familiar with the matter said one reason for the delay is that heads of several of the largest companies in the AI industry have called for slowing the pace of technological development. Trillion-Dollar Financing Demand Tests Credit Markets AI investment continues to expand, but funding is not without bottlenecks. The combined 2026 capital expenditure guidance for the five largest U.S. cloud computing companies exceeds $750 billion, and is expected to surpass $1.1 trillion in 2027; by 2030, cumulative AI capital expenditure could reach $5.5 trillion. JPMorgan estimates that over the next five years, the investment-grade corporate credit market will provide more than $2.1 trillion in financing for data centers, with high-yield bonds and leveraged loans contributing an additional approximately $350 billion. The discount and stalled distribution of Oracle Corporation's $18 billion loan occurred at the early stage of this financing wave. This article is reprinted from "Wall Street Insights," author: Gao Zhimou; GMTEight editor: Yan Wencai.