Yet another Hacker News

Oracle files to sell $20B in new stock, bonds to finance AI buildout

51 points smartmic 1 hour ago 23 comments

jawiggins 52 minutes ago | parent

Previously, I thought investing in AI companies would be a good hedge against AI taking my job, but I hadn't considered the possibility that they fund the build out by issuing shares. Is there no reprieve?

program_whiz 28 minutes ago | parent

maybe not. There could be mass unemployment and all the big dogs could also lose from the buildout while smaller players (non-public) take over. It could be a lycos / yahoo / google situation where there was no "winner" to invest in during the initial dotcom crash, and there was large-scale disruption all the same.

arisAlexis 5 minutes ago | parent

The dotcom crash has nothing to do with the AI build out

BigTTYGothGF 22 minutes ago | parent

Not for people like us.

arisAlexis 5 minutes ago | parent

It actually is but very few people realized that yet. We are still at "it doesn't work it's a fluke" denial phase

dcrazy 50 minutes ago | parent

Half of that would be in stocks, resulting in 2.5% dilution for shareholders at the current market cap. But the stock is down 8%.

loeg 25 minutes ago | parent

It's not dilutive -- current shareholders get $10B (or 97% of $10B, whatever). Market reaction is some combination of profitability concern / bankruptcy risk because Oracle is super leveraged and taking on even more debt. Maybe the AI hyperscalars will slow down spending in 2028.

donkers 20 minutes ago | parent

It’s literally dilutive. Current shareholders now only own 97.5% of the equity instead of the 100% they owned previously.

dcrazy 16 minutes ago | parent

Yes, even if the company raises $10b, the ownership stake and voting power of a share is reduced by 2.5%.

And if that $10b figure is a fixed target, then if the share price continues to fall, the more shares they will need to issue, resulting in even more dilution.

Computer0 50 minutes ago | parent

Of all the companies in the world this is one of the ones I root against the hardest. Hoping for the worst outcome on this investment.

mistrial9 36 minutes ago | parent

Do not make the mistake of anthropomorphizing Larry Ellison!

silverFork 15 minutes ago | parent

LOL..

petre 22 minutes ago | parent

Yeah I hope they get bought by Broadcom, like VMWare and the board sends Larry straight to retirement.

ai_critic 34 minutes ago | parent

Misread the title at first as "to finance AI bailout".

silverFork 16 minutes ago | parent

LOL.. It is that under the cover.

Tostino 29 minutes ago | parent

I hope nothing but the worst for Oracle as a corporation...though nothing against the technical talent there.

baggachipz 22 minutes ago | parent

I would assume it's to hire more lawyers.

proc0 21 minutes ago | parent

Skynet finally? (Terminator movie used Oracle building as Skynet HQ, forgot which one)

genxy 17 minutes ago | parent

We are b-roll in the skynet/oracle cinematic universe.

flowerlad 13 minutes ago | parent

Oracle does not have any proprietary IP that OpenAI depends on. That means Oracle is providing commodity services to OpenAI.

AI hardware is advancing rapidly. If NVIDIA's next generations deliver radically more tokens per watt and per dollar, an Oracle facility designed, financed, and contracted around an older GPU generation can be overtaken before it is fully online or fully monetized.

That's a big risk.

And to finance this they are making deep cuts to the ERP business where Oracle does have proprietary IP.

bigyabai 11 minutes ago | parent

On strictly business terms, you're absolutely correct. Considering that OpenAI and Oracle both eat from Trump's hand though, I think that Larry Ellison has a few tricks up his sleeve to remain a "necessary" contractor. This is probably a shorter-term investment to pad out the coffers 5-10 years from now.

If rampant despotism is the end-goal, Oracle has already aligned themselves with the despots.

thedougd 10 minutes ago | parent

Broadcom is waiting to buy up the pieces.