Oracle stock climbs 6% on OpenAI funding talks

Oracle shares gained 6% by midday on 17 September. The advance followed reports that its primary artificial intelligence partner, OpenAI, is holding discussions to raise capital at a valuation of $1.2 trillion.

The market reaction reflects Oracle's heavy exposure to the AI startup. In September of last year, Oracle agreed to a $300 billion contract to supply computing power to OpenAI. That deal established Oracle as a leading hyperscaler, but it also prompted investor concern that it took on excessive risk building costly infrastructure for a single client.

Those worries had recently reached the credit markets, driving higher spreads on Oracle credit default swaps, which measure the cost of insuring against default. Market sentiment had also taken a hit after OpenAI delayed its planned initial public offering from 2026 to at least 2027.

The prospective new capital injection at a $1.2 trillion valuation would help alleviate market doubts about OpenAI's financial strength and reduce the risk profile of Oracle's aggressive infrastructure expansion.