A gauge of risk on Oracle debt "reached a three-year high in November," reports Bloomberg. "And things are only going to get worse in 2026 unless the database giant is able to assuage investor anxiety about a massive artificial intelligence spending spree, according to Morgan Stanley." A funding gap, swelling balance sheet and obsolescence risk are just some of the hazards Oracle is facing, according to Lindsay Tyler and David Hamburger, credit analysts at the brokerage. The cost of insuring Oracle's debt against default over the next five years rose to 1.25 percentage point a year on Tuesday, according to ICE Data Services. The price on the five-year credit default swaps is at risk of toppling a record set in 2008 as concerns over the company's borrowing binge to finance its AI ambitions continue to spur heavy hedging by banks and investors, they warned in a note Wednesday. The CDS could break through 1.5 percentage point in the near term and could approach 2 percentage points if communication around its financing strategy remains limited as the new year progresses, the analysts wrote. Oracle CDS hit a record 1.98 percentage point in 2008, ICE Data Services shows... "Over the past two months, it has become more apparent that reported construction loans in the works, for sites where Oracle is the future tenant, may be an even greater driver of hedging of late and going forward," wrote the analysts... Concerns have also started to weigh on Oracle's stock, which the analysts said may incentivize management to outline a financing plan on the upcoming earnings call... Thanks to Slashdot reader Bruce66423 for sharing the article.

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An anonymous reader shares a report: It's too soon to be talking about the Curse of OpenAI, but we're going to anyway. Since September 10, when Oracle announced a $300 billion deal with the chatbot maker, its stock has shed $315 billion in market value. OK, yes, it's a gross simplification to just look at market cap. But equivalents to Oracle shares are little changed over the same period (Nasdaq Composite, Microsoft, Dow Jones US Software Index), so the $15 billion loss figure [figure updated with stock price] is not entirely wrong. Oracle's "astonishing quarter" really has cost it nearly as much as one General Motors, or two Kraft Heinz.

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