Several banks are cutting off loans to Oracle. What's going on with the giant Oracle?

Multiple banks cut off credit to Oracle. What’s going on with the tech giant Oracle? In the global market, Oracle is considered an invisible giant—although many people are not very familiar with it, anyone in the tech industry knows Oracle well. Recently, however, several banks have stopped lending to Oracle. What exactly is happening?

1. Are multiple banks cutting off credit to Oracle?

According to China Business News, recently, investment bank TD Cowen reported that due to financing difficulties in expanding Oracle’s AI data centers, Oracle is facing serious funding challenges and is considering measures such as large-scale layoffs and divesting some businesses to cope.

TD Cowen’s research report states that Oracle plans to lay off 20,000 to 30,000 employees, which is expected to free up $8 billion to $10 billion in cash flow. Moreover, Oracle is also considering selling its healthcare software division Cerner, which it acquired for $28.3 billion in 2022.

TD Cowen pointed out that currently, several US banks have stopped providing loans related to Oracle’s data center projects. The firm added that banks in Asia seem more optimistic about Oracle, but the attitude of US banks raises doubts about whether Oracle can secure support from other large banks.

The report notes: “Equity and debt investors are questioning whether Oracle has the capacity to finance these projects.” The root of the financing challenge lies in Oracle’s massive infrastructure commitments, with TD Cowen estimating that capital expenditures could reach $156 billion. With funding hard to secure, Oracle has had to resort to layoffs and divestments to ease financial pressure.

However, according to Jiemian News, on February 1, Oracle announced its financing plan for the full fiscal year 2026. Oracle stated that it expects to raise a total of $45 billion to $50 billion through a balanced mix of debt and equity financing in FY2026. Oracle said that the funds would be used to build new capacity to meet the signed demands of key clients including AMD, Meta, and NVIDIA.

2. What’s really going on with the giant Oracle?

Recently, news about multiple banks possibly cutting off credit to Oracle has attracted widespread attention. As a globally renowned tech giant, Oracle has historically played a significant role in database and enterprise IT systems. Now, facing such rumors, one can’t help but wonder what is really happening behind the scenes.

First, the AI market is currently experiencing unprecedented competition. Major companies are increasing investments to secure a foothold in this opportunity-rich and challenging field. From tech giants to startups, everyone is actively deploying—from basic research to application development, from hardware to software algorithms. This comprehensive competition has created a highly competitive and tense market environment.

In this context of large-scale investment, the outlook for companies has become increasingly unpredictable. Those that underperform in R&D, market expansion, or have unclear business models are naturally subject to skepticism. Although Oracle has a strong technical foundation and a large user base, its performance in the rapidly evolving AI field has not met market expectations. Compared to emerging AI startups, Oracle appears somewhat slow in innovation and application deployment.

This has led investors and financial institutions to reassess Oracle’s future potential and question whether it can maintain a leading position amid fierce market competition. In the tech industry, the rule of “if you don’t advance, you fall behind” is eternal. If a company cannot keep pace with the market, it risks being overtaken and losing market share and competitive advantage.

Second, Oracle’s rise in the 1990s was driven by the enterprise information wave, with its relational databases once being the “heart” of large organizations’ IT systems worldwide. However, with the rise of cloud computing, microservices architectures, and open-source ecosystems, traditional closed, high-cost licensing software models are rapidly being dismantled. Platforms like AWS, Azure, and Google Cloud dominate the market with elastic computing, pay-as-you-go models, and deep AI integration. In contrast, Oracle’s cloud efforts, such as Oracle Cloud, started later, with a weaker ecosystem and a long-standing reliance on licensing sales.

More critically, Oracle’s actions in building data centers—core infrastructure for AI—are less aggressive than competitors. Although Oracle has announced investments in AI data centers across the US, the scale and strategic deployment remain conservative. As industry focus shifts from “software features” to “compute power + data + models,” Oracle’s traditional moat is eroding. Its technological assets are less efficiently monetized, which naturally diminishes its attractiveness to capital.

Third, the reports of “multiple banks cutting off credit” more likely reflect a risk appetite adjustment rather than a liquidity crisis. As a multinational with annual revenue exceeding $50 billion and strong cash flow, Oracle has robust internal financing capabilities. In fact, Oracle is actively pursuing large bond issuance plans, demonstrating management’s confidence in the long-term capital markets. Additionally, Oracle maintains deep relationships with enterprise clients and has stable subscription revenues. Its core database products remain indispensable in finance, telecom, and other key industries.

Therefore, even if some banks tighten credit for risk control, Oracle can meet its funding needs through other channels. From this perspective, the “credit cut” rumors are more about market sentiment than a fundamental financial crisis. The real concern is not a liquidity crunch but a collective market doubt about Oracle’s strategic direction.

Fourth, over the past decade, the tech industry has embraced a “growth at all costs” investment philosophy—any company with impressive user growth or revenue increase could tolerate losses and high investments. However, with rising global interest rates, macroeconomic uncertainties, and AI’s long ROI cycles, capital markets are becoming more rational. Investors now demand clear profitability paths, verifiable technological barriers, and sustainable business models.

Oracle’s current predicament exemplifies this trend. It cannot tell a disruptive innovation story like some AI startups, nor does it benefit from the extensive infrastructure synergies of cloud giants. Caught between old and new paradigms, Oracle’s “middle state” becomes increasingly awkward. It’s foreseeable that not only Oracle but all tech companies will face tougher financing environments in the future.

Capital will focus more on companies that truly master core technologies, possess ecosystem integration capabilities, and can achieve efficient commercial transformation. Those relying solely on past glories or partial advantages—“former giants”—that cannot execute a thorough strategic overhaul risk being marginalized in the next wave of industry reshuffling.