{"id":409777,"date":"2026-01-15T00:31:10","date_gmt":"2026-01-15T00:31:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/409777\/"},"modified":"2026-01-15T00:31:10","modified_gmt":"2026-01-15T00:31:10","slug":"oracle-sued-by-bondholders-over-losses-tied-to-ai-buildout","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/409777\/","title":{"rendered":"Oracle sued by bondholders over losses tied to AI buildout"},"content":{"rendered":"\n<p class=\"yf-vbsvxt\">By Jonathan Stempel<\/p>\n<p class=\"yf-vbsvxt\">NEW YORK, Jan 14 (Reuters) &#8211; Oracle was sued on Wednesday by bondholders who say they suffered losses because the company \u200bchaired by billionaire Larry Ellison concealed its need to sell significant \u200cadditional debt to build out its <a href=\"https:\/\/tech.yahoo.com\/ai\/\" data-ylk=\"slk:artificial intelligence;elm:context_link;itc:0;sec:content-canvas\" class=\"link \" rel=\"nofollow noopener\" target=\"_blank\">artificial intelligence<\/a> infrastructure.<\/p>\n<p class=\"yf-vbsvxt\">The proposed class action was filed in a \u200cNew York state court in Manhattan on behalf of investors who said they bought $18 billion of senior notes and bonds that Oracle issued on September 25, shortly after the software and cloud computing company signed a $300 billion, five-year contract to supply \u2060Sam Altman&#8217;s <a href=\"https:\/\/www.yahoo.com\/organizations\/openai\/\" data-ylk=\"slk:OpenAI;elm:context_link;itc:0;sec:content-canvas\" class=\"link \" rel=\"nofollow noopener\" target=\"_blank\">OpenAI<\/a> with computing \u200cpower.<\/p>\n<p class=\"yf-vbsvxt\">These investors said they were blindsided when Austin, Texas-based Oracle returned to the capital markets seven weeks later to obtain $38 \u200dbillion of loans to fund two data centers in Texas and Wisconsin to support the OpenAI agreement.<\/p>\n<p class=\"yf-vbsvxt\">&#8220;The bond market&#8217;s reaction to Oracle&#8217;s additional debt was swift and bracing,&#8221; the bondholders said, \u200bas their own debt fell in value and began trading at yields \u200cand spreads comparable to debt from lower-rated companies because of the perceived higher credit risk. Oracle&#8217;s notes and bonds carried low investment grades.<\/p>\n<p class=\"yf-vbsvxt\">Bondholders led by the Ohio Carpenters&#8217; Pension Plan said statements in offering documents for their bonds that Oracle &#8220;may&#8221; need to borrow more were false and misleading, because the company was already planning \u2060to do so.<\/p>\n<p class=\"yf-vbsvxt\">The bondholders said Oracle, Ellison, former \u200bChief Executive Safra Catz, Chief Accounting Officer Maria \u200bSmith and 16 underwriting banks are strictly liable under the federal Securities Act of 1933 for those statements, and should pay \u200dunspecified damages.<\/p>\n<p class=\"yf-vbsvxt\">Oracle declined to \u2060comment. Lawyers for the bondholders did not immediately respond to requests for comment.<\/p>\n<p class=\"yf-vbsvxt\">Oracle ended November with about $108 billion of outstanding notes and other \u2060borrowings.<\/p>\n<p class=\"yf-vbsvxt\">The company&#8217;s shares were down 5% in afternoon trading on the New York Stock Exchange.<\/p>\n<p class=\"yf-vbsvxt\">(Reporting by \u200cJonathan Stempel in New York; Additional reporting by Stephen Nellis \u200cin San Francisco; Editing by Nick Zieminski)<\/p>\n","protected":false},"excerpt":{"rendered":"By Jonathan Stempel NEW YORK, Jan 14 (Reuters) &#8211; Oracle was sued on Wednesday by bondholders who say&hellip;\n","protected":false},"author":2,"featured_media":409778,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,276,277,172542,49,48,20522,61],"class_list":{"0":"post-409777","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-bondholders","12":"tag-ca","13":"tag-canada","14":"tag-larry-ellison","15":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/409777","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=409777"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/409777\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/409778"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=409777"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=409777"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=409777"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}