Oracle is staring down the possibility of its largest-ever workforce reduction—and at the heart of it is a $300 billion partnership with OpenAI that’s proving far more expensive than anyone initially let on.Investment bank TD Cowen reported this week that Oracle is weighing cuts of 20,000 to 30,000 jobs. The move would free up an estimated $8 to $10 billion in cash flow, money the company desperately needs as it tries to bankroll a sprawling network of AI data centers built largely to serve Sam Altman’s company.
‘OpenAI deal is eating Oracle alive financially’
TD Cowen puts the OpenAI commitment alone at around $156 billion in capital spending—and roughly 3 million GPUs to back it up. Oracle has already burned through $58 billion in debt in just two months. That’s $38 billion for data centers in Texas and Wisconsin, $20 billion for a campus in New Mexico. Total debt now sits north of $100 billion.The kicker? That $58 billion covers only a slice of what’s actually needed. Since its September 2025 peak, Oracle’s stock has shed more than half its value—about $463 billion in market cap, gone.
US banks are pulling back—and that’s a big problem
The financing crunch isn’t just an Oracle internal issue anymore. Multiple US banks have quietly retreated from lending on Oracle-linked data center projects. TD Cowen noted that lenders have roughly doubled the interest rate premiums they charge Oracle since September, pushing borrowing costs into territory usually reserved for junk-rated companies.The result? Several data center leases Oracle had been negotiating simply stalled. Private operators couldn’t get the funding to build, which means Oracle can’t deliver the capacity its customers—especially OpenAI—are counting on. Some Asian banks are still willing to step in, but that doesn’t solve the immediate problem in the US, where most of Oracle’s expansion is planned.
A possible Cerner sale and 40% upfront customer deposits show how tight things have gotten
Oracle isn’t sitting idle. The company is now requiring new customers to pay up to 40% of contract value upfront—essentially asking clients to co-fund the infrastructure. It’s also exploring “bring your own chip” arrangements, where customers supply their own hardware.On the table too is a potential sale of Cerner, the healthcare software unit Oracle bought for $28.3 billion in 2022. That would be a significant strategic pivot, signaling that AI infrastructure is now the clear priority—everything else is up for grabs.TD Cowen also flagged that OpenAI has already begun shifting some near-term capacity needs over to Microsoft and Amazon, which is not exactly a vote of confidence in Oracle’s ability to deliver on schedule.The company has not publicly commented on the layoff reports or the financing difficulties.
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