S&P Cuts Oracle to BBB- as $15 Billion Wisconsin Data Center Faces Credit Fight

3 articles · Updated · Urban Milwaukee · Jul 20

S&P cut Oracle to BBB- on July 9, leaving it one notch above junk after concluding the company is spending on AI expansion faster than it can generate revenue.
The downgrade lands in the middle of Oracle’s court fight over a planned $15 billion Port Washington data center, where Wisconsin regulators require major data-center customers to hold at least an A- or A3 rating or post collateral.
Oracle says those safeguards could cost it more than $100 million a year, while the Public Service Commission and consumer advocates argue they protect ratepayers from being stuck with up to $7 billion in utility infrastructure built for data centers.
S&P expects Oracle’s free-cash-flow deficit to widen to $42 billion in fiscal 2027 and flagged OpenAI as a key credit risk in the partners’ broader $500 billion Stargate AI buildout.

Sources

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Urban Milwaukee1d ago

Oracle's Credit Rating Cut to BBB- by S&P Amid AI Spending and Wisconsin Data Center Legal Battle

Financial Times1d ago

Oracle could face $7bn collateral bill for Wisconsin data centre

finance.biggo.com1d ago

Oracle's Wisconsin AI Data Center Hits Roadblock: Regulator Demands Over $7 Billion Guarantee, S&P Cuts Rating to Junk-Edge — BigGo Finance

7 Sources

Oracle's credit is near junk status. Will its massive AI bet with OpenAI trigger a financial crisis for the company?

With one tech giant faltering, is the trillion-dollar AI investment boom turning into a bubble ready to pop?

Oracle’s $15 Billion Wisconsin AI Data Center Threatened by $7 Billion Collateral Demand and Credit Downgrade

Overview

Oracle is facing a major financial crisis after its stock dropped over 25% following a lawsuit against Wisconsin’s Public Service Commission (PSC). In response, the PSC demanded $7 billion in collateral for Oracle’s planned AI data center, aiming to protect local customers from the risks of project delays or abandonment. This requirement, rooted in Wisconsin’s regulatory framework, is designed to prevent residents from bearing the costs of large infrastructure investments. The Citizens Utility Board supports these tighter financial safeguards, highlighting past corporate failures as a warning. This dispute has become a central challenge for Oracle’s ambitious expansion plans.

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