Oracle Shares Slide as OpenAI Revenue Restatement Exposes Cracks in the AI Infrastructure Boom

Oracle shares slid 6.2% after OpenAI's revised revenue figures and data-center funding worries deepened doubts over AI infrastructure spending.

Oracle's stock came under heavy selling pressure as a recalibration of OpenAI's revenue figures rippled through the AI infrastructure complex, compounding existing worries about how the software giant will fund its sprawling data-center ambitions.

The shares dropped 6.2% in yesterday's session to close at EUR 120.64, extending a year-to-date decline to 27%. A separate reading put the stock at EUR 121.00 following a 6.0% intraday fall, with both figures reflecting the same broad retreat in technology names.

A $20 Billion Accounting Gap Shakes Confidence

At the heart of the selloff were reports from the Financial Times and CNBC detailing revised figures that OpenAI recently shared with investors. The AI developer's annualized revenue stood at roughly $50 billion at the end of September — a sharp step down from the $68 billion to $70 billion that had been circulating in market circles.

People familiar with the matter attributed the roughly $20 billion discrepancy to a change in how revenue is counted. The earlier estimate had included gross proceeds booked through cloud partners, while the updated number reflects net revenue instead.

The underlying growth trajectory remains steep. OpenAI's revenue run rate expanded 77% in the third quarter, with the enterprise segment surging 107%. Even so, the arithmetic adjustment was enough to unsettle partners who have staked billions on the assumption that AI demand would scale at a predictable clip.

Few companies are as exposed to that assumption as Oracle. The company has locked in multibillion-dollar cloud-computing commitments with OpenAI that account for a substantial slice of its total order backlog, which reached $664 billion in the most recent quarter.

Capital Spending Outpaces Cash Generation

The uncertainty arrives while Oracle is pouring money into infrastructure at a pace that has outstripped its ability to generate cash. Capital expenditures in the June-to-August quarter hit $28.5 billion, pushing free cash flow to negative $5.4 billion.

Building out data centers has also meant confronting logistical bottlenecks that few anticipated. According to Bloomberg, Oracle has resorted to trucking natural gas to facilities in Utah and Texas. At its 2.45-gigawatt Jupiter project in New Mexico, construction of a pipeline has stalled after regulators rejected the proposed route. Oracle issued a force majeure notice to the project's developer last month. Industry specialists estimate that gas delivered by truck costs roughly four times as much as pipeline supply.

Financing costs for new computing capacity are adding another layer of caution. Media reports indicate Oracle is exploring structures with financial investors to lease pricey AI chips through external vehicles. The company is said to be in talks with Apollo Global Management and Goldman Sachs to fund a large purchase of specialized processors, potentially through a separate entity that would buy the chips and lease them back to Oracle. Neither the financial terms nor the precise volume have been disclosed.

Analyst Dan Ives currently rates the stock neutral with a price target of $155, pointing to Oracle's hefty investment plans of $90 billion to $95 billion for the fiscal year.

Reuters linked the financing reports to broader concerns that heavy debt issuance across big technology companies could intensify competition for available capital. Major cloud providers face enormous outlays to equip their data centers for compute-intensive workloads, and the turn to outside partners and alternative funding routes underscores just how capital-hungry the segment has become. For investors, that raises the specter of rising leverage and heavier interest burdens.

Legal and Security Headwinds Add to the Pressure

Beyond the financing questions, Oracle is grappling with the fallout from an earlier IT breach. A report from the Texas attorney general disclosed on Monday that a security incident involving Oracle Health's legacy Cerner systems in 2025 compromised data belonging to nearly 20 million individuals, including personal and medical information of about 3 million Texas residents. Oracle declined to comment to Bloomberg.

The episode has thrust the integration of the acquired Cerner business back into the spotlight. Data-protection issues in the sensitive medical field carry significant regulatory risks for IT service providers and can erode the confidence of institutional clients.

On the business front, international partnerships have also drawn attention. On October 1, the Financial Times reported an agreement with Tencent for a five-year lease of roughly 100,000 AI chips in Southeast Asian data centers. The deal's value was estimated at $7 billion, with about 30% payable upfront. Reuters was unable to independently verify those figures.

For now, the risks surrounding Oracle's massive funding needs for infrastructure buildout are outweighing the positives in investors' minds. Whether the doubts about AI infrastructure monetization fade or continue to weigh on valuations will likely hinge on the upcoming quarterly earnings reports from the major technology companies.