Oracle rating downgraded by S&P, now stands one notch above junk; reason is Sam Altman
S&P Global Ratings downgraded Oracle to one notch above junk status, citing the company's heavy reliance on OpenAI for future revenue. The agency expressed concern over the massive capital expenditure required for Oracle's AI infrastructure.
Why it matters
This highlights the financial risks associated with the massive infrastructure spending required to sustain the current AI boom.
S&P Global Ratings has lowered its long-term issuer credit rating (ICR) on Oracle to ‘BBB-’ from ‘BBB’ — one notch above speculative grade, commonly known as junk status. White the rating agency maintained a stable outlook, it identified Sam Altman-led OpenAI as a "key credit risk" for the company. S&P said that it estimates that OpenAI makes up roughly half of the $638 billion in remaining performance obligation (RPO), further adding that if the ChatGPT-maker fails to pay Oracle, it “could be left with massive data center leases”.Oracle’s growing AI infrastructure business is diluting its strong business risk profile: S&PIn its official announcement, S&P said: “We assigned Oracle a negative outlook in July 2025 due to the pace of its AI infrastructure buildout and the potential financial impact”.
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