ORACLE FINANCIAL SERVICES SOFTWARE SHARES FALL

Shares of Oracle Financial Services Software fell 6% on September 21 after raised concerns over around $18 billion in loans linked to an Oracle-leased data centre project in New Mexico. According to the report, loans tied to the project were being quoted at 89–91 cents on the dollar by syndicate banks, including Santander and Jefferies, reflecting growing concerns among lenders. The development comes amid rising local opposition to the project over potential impacts on water supplies and air quality, raising questions about the progress of Oracle’s broader AI infrastructure expansion. The 1,400-acre “Project Jupiter” campus in Doña Ana County is part of Oracle’s wider agreement with OpenAI to provide AI computing capacity. The project reportedly secured $18 billion in financing from a consortium of banks late last year to fund its construction. Attempts to distribute the debt among a broader group of investors have reportedly stalled, amid concerns over Oracle’s increasing borrowing and weakening credit profile. Oracle’s corporate credit rating is currently just one notch above junk following a downgrade by S&P in July. As a result, banks are reportedly being required to retain more Oracle-linked project debt on their balance sheets than initially anticipated. Oracle has been significantly increasing spending to expand its AI infrastructure, while the resulting rise in debt has attracted greater scrutiny from investors. Project Jupiter was initially planned to be powered by 2.2 gigawatts of gas turbines. However, the New Mexico state land office blocked a request to build a natural gas pipeline supplying the data centre, adding another hurdle to the project’s development.