S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-
Points and comments are a snapshot, not live.
S&P downgraded Oracle to BBB-, one notch above junk, due to AI investments.
S&P Global lowered Oracle's credit rating from BBB to BBB- on July 9, citing massive AI infrastructure spending. The rating agency forecasts a free cash flow deficit of nearly $42 billion for fiscal 2027, with Oracle raising spending to $90-95 billion. S&P views OpenAI as a central credit risk, noting about half of Oracle's $638 billion in promised service volume is attributable to OpenAI. Oracle cut over 21,000 jobs (13% of its workforce) to finance the AI expansion. The company's cloud infrastructure share is expected to rise from 27% to nearly 60% by 2028.
What commenters are saying
Commenters focused on Oracle's financial risks and the AI industry's lack of moats. Several speculated on Oracle's options if it cannot pay debts: selling its software business, seeking a bailout, or being absorbed by competitors. A dominant thread argued that no AI companies have true moats in the Graham sense, with users treating models as commodities and switching freely. One commenter noted that proprietary training data is the emerging moat, but another countered that the only real winners are incumbent technology providers like Microsoft, whose unified enterprise stack creates lock-in. Nvidia's CUDA moat was also debated.