The mechanism
Take out the gigawatts and the dollars, and this is a four-step loop that repeats every time Oracle signs another large contract.
1
A contract Oracle never names
OpenAI reportedly commits to about $300bn of Oracle cloud compute over roughly five years, starting in 2027. Oracle’s own filings have never named OpenAI as the counterparty.
2
The backlog jumps
Oracle reports this contract bundled with others as part of its “remaining performance obligations” — signed but unbilled work. The figure rises from $138bn to more than $455bn in a single quarter.
3
The market re-rates Oracle
Investors price Oracle as an AI infrastructure company rather than a database one. The stock closes up 36% the next day, its best day since 1992.
4
Oracle borrows against the backlog
To build the data centres the backlog implies, Oracle raises debt and equity years before the matching revenue arrives, spending $1.61 for every dollar its operations bring in.
More backlog justifies more borrowing to build more capacity, which is pitched to investors as the route to still more backlog.
What's confirmed, and what isn't
The $300bn contractReported
Oracle's SEC filings have never named OpenAI as a counterparty. What's public rests on the Wall Street Journal citing people familiar with the matter.
The backlog jumpIn the filings
Oracle's disclosed "remaining performance obligations" rose from $138bn to $455bn in a single quarter, then to $638bn and $664bn, without naming which customers make it up.
OpenAI as "about half"Reported
The share comes from S&P's rating action and from investor commentary, not from a customer-by-customer breakdown Oracle has published.
The rating movesIn the filings
S&P's cut to BBB− and Moody's negative outlook are the agencies' own published actions.
The long view
For most of the period since 2018, Oracle was a slow-moving database stock. It closed at $48.47 in the first week of 2018 and $54.68 just before the Covid crash, and had reached $83.35 by the week ChatGPT launched. The AI trade then nearly tripled it by the week before its September 2025 results. At $126.19 today, it is back where it traded in June 2024.13
Timeline
The line below is Oracle's closing price every trading day from August 2025; each number is an event in the timeline that follows. The whole jump came in one session, and the stock has since given all of it back, and more.
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9 Sep 2025
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10 Sep 2025
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10 Sep 2025
The $300bn figure is reported, not confirmed
The same day, The Wall Street Journal reports, citing people familiar with the matter, that OpenAI has signed to buy $300bn of Oracle computing power over roughly five years. Oracle declines to comment; the contract is never named in an Oracle filing.4
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10 Sep 2025
Ellison +$100bn in a day
Ellison briefly becomes the world's richest person
Larry Ellison’s stake in Oracle makes him about $100bn richer in a single session, taking his net worth to roughly $392.6bn and, for a few hours, past Elon Musk as the world’s richest person, before Musk reclaims the position.3,5
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22 Sep 2025
Moody's flags the dependence
Having already turned Oracle’s outlook negative in July over its debt-funded capex plans, Moody’s now singles out “counterparty risk” in the OpenAI contract, noting OpenAI “doesn’t yet have the money it has promised” and might raise only $40bn this year.1
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2 Feb 2026
Oracle promises to fund the build with more equity
With Moody’s outlook still negative, Oracle says it will raise up to $20bn of common equity and some preferred stock as part of $45–50bn of 2026 funding needs, “to maintain an investment grade rating.”6
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12 Jul 2026
S&P cut to BBB−
S&P downgrades Oracle
S&P Global cuts Oracle one notch to BBB−, one above junk, naming OpenAI a “key credit risk.” OpenAI is now reported to account for roughly half of Oracle’s $638bn backlog, and capex guidance has risen to $95bn for 2027.7
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24 Sep 2026
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8–14 Oct 2026
Oracle −5.5%, then −8.8%
Credit stress spreads from CoreWeave
A bond scare that starts at CoreWeave reaches Oracle: shares fall 5.5% on 8 October as OpenAI revenue details circulate, then 8.8% on 14 October as rate fears revive. Oracle’s five-year credit-default swaps, near 150bp a year earlier, trade close to 295bp by late October.9,10
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23 Oct 2026
Oracle $126.16, −55% in a year
A year of beats, a halved share price
Despite beating earnings estimates in four straight quarters, Oracle closes at $126.16, down 55% over the year. “Half of Oracle’s backlog is just OpenAI,” investor Steve Eisman says on The Compound and Friends — a rough read on a reported $300bn contract that is about 45% of it.11
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2 Nov 2026
Oracle −8.8% on the day
Oracle prices its next raise
Oracle prices $20bn of new common stock and senior notes to keep funding the build-out. The stock falls further on the dilution.12
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3 Nov 2026
Why it matters for the loop
In the money loop, this shows as a single $300bn ribbon from OpenAI to Oracle, the biggest spending commitment in the diagram, and one neither company's filings confirm by name. It is also why Oracle carries the largest pile of signed-but-not-started leases relative to its size and the tightest cash flow of the five hyperscalers we track in The builders, and why the debt behind one piece of the build-out, Project Jupiter, has traded near 80 cents on the dollar. See Off the books.14
Sources
- The Register: Moody's raises questions over Oracle's AI DC expansion plans (22 September 2025)
- Bloomberg: Oracle posts strong bookings following OpenAI cloud deal (9 September 2025)
- Channel News Asia: Oracle soars on AI cloud gains, Ellison closes in on Musk as world's richest (10 September 2025)
- The Wall Street Journal: Oracle, OpenAI sign $300 billion cloud deal (10 September 2025)
- CNBC: Larry Ellison is over $100 billion richer after Oracle earnings report (10 September 2025)
- Moody's Ratings: Moody's Ratings affirms Oracle's Baa2 rating on equity announcement; outlook remains negative (2 February 2026)
- the-decoder: S&P Global sees OpenAI as a 'key credit risk' for Oracle and cuts its credit rating (12 July 2026)
- Reuters: Oracle, Blue Owl project delay sends ripples through AI financing (24 September 2026)
- Yahoo Finance: Oracle just dropped 12% in a month. Is it time to sell, or load up? (20 October 2026)
- CNBC: Oracle faces key test as credit stress threatens the AI trade (19 October 2026)
- Yahoo Finance (via TIKR): Oracle stock is down 55% in a year. Bargain or value trap? (25 October 2026)
- Oracle (press release): Oracle announces pricing of $20 billion of common stock and senior notes (2 November 2026)
- Yahoo Finance: Oracle Corporation (ORCL) stock historical prices (3 November 2026)
- FinancialMarkets.com (citing The New York Times): Debt on Oracle's New Mexico AI campus has traded near 80 cents (23 October 2026)