# S&P downgrades Oracle to BBB-, one notch above junk Rating agency cites AI infrastructure investments as increasing debt burden - **Source:** [Hacker News: Front Page](https://brifing.si/source/b07aa772-b1a0-4a76-aa18-719c6f9e2dde) - **Published:** 2026-07-14 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/5c5017ac-de53-4655-bccf-55bd36ff5049 ## Credit rating downgrade S&P Global downgraded Oracle's credit rating from BBB to BBB-, the lowest investment-grade level. One more downgrade would push the company into speculative territory. However, S&P maintained a stable outlook for the database giant. ## AI investments pressure finances The rating agency attributed the downgrade to Oracle's massive investments in AI data centers. S&P forecasts a $42B free cash flow deficit for fiscal 2027, which Oracle plans to finance through a mix of debt and equity offerings. ## OpenAI dependency risk S&P views Oracle's heavy reliance on OpenAI as a critical risk, with half of its $638B in committed but undelivered service volume tied to the AI firm. This creates substantial credit exposure if OpenAI faces payment difficulties. ## Transformation to hyperscaler Oracle is shifting from software to cloud infrastructure, which accounted for 27% of 2026 revenue and may reach 60% by 2028. However, S&P considers Oracle weaker than rivals like Microsoft and Amazon in financial flexibility. ## Workforce reductions To fund AI infrastructure, Oracle cut over 21,000 jobs (13% of workforce) in the past year. This 'people to machines' strategy aims to reduce costs while scaling cloud capacity to meet AI demand. ## Sector-wide warning signs Financial regulators warn debt-fueled AI investments resemble dot-com bubble risks. The Bank for International Settlements sees parallels with 2008 crisis triggers, citing Nvidia and OpenAI debt as potential systemic risks. ## Sources covering this story - https://www.heise.de/en/news/S-P-downgrades-Oracle-to-BBB-only-one-notch-above-junk-level-11363472.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._