Oracle Faces $7B Collateral Demand From Wisconsin Regulator Over OpenAI Data Center
- Wisconsin's Public Service Commission declined to reconsider new credit rules for utility We Energies, which would force Oracle to post a $7B letter of security to protect households from rising electricity costs.
- The collateral requirement would cost Oracle more than $100M a year.
- The nearly 1 gigawatt data center is in Port Washington, Wisconsin, and is central to Oracle's $300B contract with OpenAI to supply computing power.
- On Hacker News, commenters flagged that S&P Global just cut Oracle's credit rating from BBB to BBB-, one notch above junk, adding to worries about its debt load.
- Commenters also cited a report that five US tech giants' hidden AI-related debt has reached $1.65T, and questioned whether Oracle's datacenter buildout is actually on track given recent layoffs on its cloud infrastructure team.
Hacker News 의견들
S&P just cut Oracle from BBB to BBB-, one level above junk. That's yikes territory.
Every stock should be able to go to zero if we actually want a free market to mean something.
Wait, that's after they already got downgraded last fall too. Is this thing sinking like a stone?
From what I can tell the DC buildout isn't going well at all, barely any news of new ones coming online. Getting power onsite is hitting permitting walls and they can't even find turbines to buy.
Launching datacenters into space to solve a power supply problem makes zero sense, we're not more power constrained on land than we'd be trying to do solar plus cooling plus launch infrastructure in orbit.
If Oracle can't secure power gen for Wisconsin they've been asleep at the wheel. Generac is literally headquartered in WI and expanding manufacturing to meet DC demand, a year ago Oracle could've just bought them outright.
My buddy worked on Oracle's team that stood up cloud datacenters worldwide from 2019 until this year, and they just laid off half his 15 person team. Doesn't add up if they're actually scaling buildout.
Maybe senior leadership just isn't happy with the pace of buildout over the last 5 years and that's why the cuts.
Oracle is starting to look like the Lehman Brothers of this AI boom, one day it all pops and drags the rest of the industry down with it.
Except Oracle is so embedded with the US government and Larry Ellison so connected that they'd get bailed out before anything actually crumbles.
They'll just spin off divisions or sell the datacenters to Anthropic or whoever at a profit, or rent compute at insane margins. Oracle isn't going anywhere.