Shareholders sue Oracle over misleading statements related to $300 billion OpenAI data center build-out — disgruntled plaintiffs say the company lied about how much money it needed to borrow

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Oracle is facing a class action lawsuit from a group of disgruntled bondholders who claim they lost money after the company misled them over how much money it needed to borrow to finance its AI infrastructure commitments. Specifically, they say the company's claim that it "may" need to borrow more money was false and misleading, because it was already planning to issue another set of bonds. According to Reuters, Oracle sold $18 billion of notes and bonds on September 25, 2025, to support its $300 billion deal with OpenAI. However, investors were surprised when the company released another set of bonds worth $38 billion almost two months later.

“The bond market’s reaction to Oracle’s additional debt was swift and bracing,” the suit reads. The market saw Oracle’s additional debt as an increased credit risk that the company is taking on. Because of this, the original series of bonds and notes have fallen in value and is now trading like debt from companies with lower ratings. The bondholders, led by the Ohio Carpenters’ Pension Plan, contend that the statements for the initial bonds said that the company was only considering another set of loans. However, they argue that Oracle already knew at this point that it was going to issue another, much larger, loan to fund its expansion. The plaintiffs said that Oracle and some of its chief executives, as well as the 16 banks that were underwriting the loan, were liable under the Securities Act of 1933.

As experts repeatedly warn about AI bubble fears, Oracle has been borrowing aggressively to fund its AI dreams. When the company launched its initial bond drive for $18 billion in September, the demand was so high that it was four times oversubscribed. But just three months later, investors are now reportedly sitting on $1.3 billion in paper losses. And even though S&P and Moody’s still rate Oracle as investment grade, its BBB or Baa2 rating places it just a couple of notches above junk rating. More than that, these rating agencies have put it on the negative watch, meaning there’s a chance that they will downgrade the company’s rating, depending on the risk that it’s taking on.

The massive AI buildout requires billions, if not trillions, of dollars in investment. This is likely not a problem for tech giants like Microsoft, Meta, and Amazon, who have massive war chests and can likely afford to keep pouring money into the infrastructure without breaking a sweat. However, other smaller companies will probably require additional funding — either through bonds and notes, private equity, selling shares, or a mixture of these. More than that, there’s also the intricate web of investments, projects, sales, and loans that multiple AI companies have built, so a failure of just one of the companies involved in it could mean a complete collapse for the entire system.

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Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.