When the U.N. and the WEF call for a circular economy I don't think this is what they mean.
From The Register September 29:
Bubble, you say? OpenAI will borrow billions to pay Big Red, who will borrow billions on the hope OpenAI pays it
As part of its $300 billion cloud compute contract with OpenAI, Oracle may need to borrow roughly $100 billion over the next four years to build the datacenters required, according to KeyBanc's projections.
KeyBanc Capital Markets reportedly estimates that Big Red may need to raise about $25 billion a year in debt over the next four years if it intends to build all the extra cloud compute infrastructure required as part of a deal the company signed with OpenAI earlier this month. Where that funding will come from is anyone's guess, but it makes this one of the largest deals in AI look increasingly like one propped up by debt that, were the AI bubble ever to pop, could mean a lot of unpaid bills.
The OpenAI agreement sent Oracle shares soaring earlier this month after the company confirmed the deal in its Q1 FY26 earnings call, which indicated that its total remaining performance obligations (RPO - a backlog of contracted revenue still to be delivered and recognized) ballooned by 359 percent year-over-year to reach $455 billion.
As reported by the Wall Street Journal, the financial soothsayers at KeyBanc don't think Oracle has anywhere near enough cash to build out the infrastructure. It's going to need to earn the bulk of that RPO - and with good reason. Oracle had around $82.2 billion in long-term debt as of Aug. 31, plus $18 billion worth of bonds it put on offer in September to fund its AI-fueled expansion plans.
According to Big Red's most recent earnings statement, Oracle has around $10 billion worth of cash and equivalents on hand, and around $9 billion of debt due within a year. Additionally, Oracle's free cash flow has declined 152 percent [sic] YoY on the back of a massive increase in capex, with the company spending $8.5 billion in Q1 26, up from $2.3 billion a year earlier....
....MUCH MORE
I don't understand the 152% decline figure but am too lazy to check.
