Moody's raises Big Red over flag Oracle's mega AI DC buildout blueprint (www.theregister.com)

Moody’s has flagged significant risks in Oracle’s rapid buildout of AI datacenter capacity, spotlighting a reported $300 billion agreement with OpenAI as part of a broader $455 billion pipeline of remaining performance obligations. The ratings agency warned that while the deal underscores massive demand for AI infrastructure (Oracle’s shares jumped ~27% on the news), it also concentrates revenue on a handful of hyperscale model builders and creates substantial counterparty risk if those customers don’t meet payment or funding expectations — OpenAI, for example, has yet to secure the full funding it’s promised and may raise around $40 billion this year. Technically and financially, Moody’s says Oracle’s pivot into standalone AI infrastructure — a material departure from its core software business — requires unprecedented capex and introduces new financing and execution risks. Although Moody’s hasn’t cut Oracle’s rating yet, it has put the outlook on negative, citing existing debt levels, the speed and scale of the planned buildout, and the evolving AI market as key overhangs. Oracle CEO Safra Catz notes contracts with major AI players (OpenAI, xAI, Meta, NVIDIA, AMD), but the dependency on a small set of large counterparties and huge upfront infrastructure commitments are the central concerns for investors and the AI/ML ecosystem.