Introduction:
The rapid decline of Oracle’s stock has sent ripples through the business world, affecting not just the tech giant but also the media empire wielded by the Ellison family. Once a formidable force, both Oracle’s valuation and the fortunes of Larry Ellison and his family are under intense scrutiny as they navigate through mounting corporate debt and a challenging economic landscape.
The hastily constructed Ellison family hasbara media empire, including Paramount, WBD, and American TikTok, is beginning to show signs of instability. Oracle’s stock has plummeted by $600 billion in market capitalization since its peak in September 2025. Additionally, its corporate debt of nearly $200 billion teeters on the brink of junk bond status.
Oracle Stock Ain’t What It Used to Be
The same can be said for the Ellison family wealth, intricately tied to Oracle’s performance.
— Nat Wilson Turner (@natwilsonturner) July 22, 2026
Despite the gloom, some analysts on Wall Street are proclaiming this as a great buying opportunity. The prevailing wisdom? Buy the dip and follow the trajectory all the way down.
This divergence in opinions among investment voices on X warrants attention.
The Bear Case:
The most entertaining outcome…$ORCL continues to nosedive, making it prohibitive to fund insane capex over the next 3 years.
Without AI growth, Oracle’s stock enters a downward spiral.
The falling stock price forces Ellison to either liquidate some of his stake to fund the… pic.twitter.com/rmYnjTHNys
— Travis Hoium (@TravisHoium) July 21, 2026
The Bull Case:
Mega bullish divergence on the 4-hour chart for $ORCL.
This looks like it could be setting up for a face-ripper rally soon. I’d say just about everyone has been washed out of this name at this point.
From a long-term perspective, these are honestly very attractive accumulation… pic.twitter.com/B8r3aThtQO
— Chris (@StonkChris) July 21, 2026
This is not investment advice, but if one were to invest in Oracle now, skepticism looms heavily over that decision. Yahoo! Finance describes the decline as “embarrassing” for Larry Ellison. Despite being the world’s eighth-richest person, he’s currently feeling the pinch:
Oracle’s billionaire founder and well-known yachting enthusiast, Larry Ellison, might be found summering on his 160-foot superyacht named the Musashi. However, his stocks have sunk to ocean depths, and it remains uncertain what could potentially buoy them.
The stock crash has not only diminished Ellison’s net worth but also complicates his son David Ellison’s ambitious bid for Warner Bros. Discovery (WBD) from Paramount (PSKY).
In September 2025, Ellison’s net worth peaked at approximately $388 billion, making him the second-richest individual behind his friend, Elon Musk. By July 13, it had plummeted to about $175 billion, representing a staggering decline of around $213 billion in less than ten months, demoting him to the eighth position on the Bloomberg Billionaires Index.
Poor guy.
What has led to this turmoil? Oracle’s significant investments in OpenAI.
Why Oracle’s Debt Got Downgraded
When S&P Global lowered Oracle’s debt rating to ‘BBB-/A-2’—just above junk status—they noted:
Oracle’s rapidly growing AI infrastructure business is heightening its overall credit risk, reflecting a cautious outlook for the AI sector, rising capital expenditure requirements, an uncertain path to profitability, and high customer concentration.
The expansion of Oracle’s AI infrastructure is diluting its formerly strong business risk profile. We assigned Oracle a negative outlook in July 2025 due to its AI build-out pace and the potential financial repercussions. We now see we underestimated the scale of the investments necessary for AI expansion and their effect on Oracle’s creditworthiness.
Despite recent contract terms requiring prepayments from clients, Oracle’s substantial remaining performance obligation (RPO) growth shows a current robust demand for AI computing. We project that Oracle’s cloud infrastructure, responsible for 27% of revenue in fiscal 2026, will constitute nearly 60% of revenue by fiscal 2028. This transformation presents higher risks compared to its traditional enterprise software and database segments, known for consistent revenue streams and sticky enterprise customers.
Oracle’s AI business demands significant upfront investments and long-term data center leases. Rising component costs may also impact its business model economics.
Furthermore, S&P pinpointed a critical factor in Oracle’s troubles:
OpenAI remains a key credit risk. We estimate OpenAI comprises nearly half of the $638 billion in RPO. OpenAI’s capacity to fulfill its contractual obligations and secure external financing is contingent upon ongoing favorable trends in the AI industry as well as maintaining its position as a market leader. Should OpenAI falter, Oracle could be on the hook for exorbitant data center leases without the means to rectify the situation.
We are closely monitoring OpenAI’s financial commitments to gauge its exposure in the market.
In terms of cash flow, Oracle anticipates challenges ahead. Its forecast for capital expenditures (capex) for fiscal 2027 has surged to $90 billion-$95 billion, up from a previous estimate of $60 billion. This change results chiefly from escalating component costs and new contract acquisitions, leading to an anticipated free cash flow deficit of approximately $42 billion for fiscal 2027.
Elon Musk could have advised Oracle CEO Larry Ellison against placing too much faith in OpenAI’s CEO, whom Musk has dubbed “Scam” Altman.
Despite these concerns, S&P maintains that Oracle is committed to retaining its investment-grade rating, citing the need for aligning cash outlays with customer prepayments as it pursues new deals. Additionally, the company’s issuance of $5 billion in mandatory convertible preferred stock and a planned $20 billion equity issue lend credibility to this strategy.
However, Oracle is candid with investors regarding the uncertain returns on its hefty data center investments.
Don’t Say Larry Didn’t Warn Us
According to Bloomberg:
Oracle recently issued a caution to investors: the substantial outlay for data centers may not yield the anticipated rewards. These disclosures were part of the company’s annual financial report, detailing plans for massive AI infrastructure investments.
Construction challenges may arise, including high costs or extended timelines due to supply chain disruptions and governmental restrictions. Once operational, major clients might choose not to renew contracts or fail to pay on time, leaving Oracle with costly, unutilized assets that they might struggle to lease or repurpose.
Unlike many tech giants, Oracle has been unusually forthright about the potential pitfalls associated with such investments.
The situation could be dire, with a report from Nikkei revealing that hidden debt among U.S. tech giants surged to an estimated $1.65 trillion due to inflated AI investments.
The study found Oracle’s hidden debt has skyrocketed to $273.3 billion, indicating a more than 30-fold increase in just four years. This burgeoning hidden debt complicates the risk assessments for investors.
The speculative nature of Oracle’s plans to pay off these debts mainly hinges on OpenAI’s success.
A Debt Built on Sand?
In biblical terms, betting the future of Oracle on OpenAI could be akin to constructing a house on shaky ground:
As noted by Ed Zitron, the only viable way for OpenAI to fund its substantial cloud compute contract with Oracle is through revenue growth projections suggesting it will reach $113 billion in 2028, $184 billion in 2029, and $284 billion in 2030—figures that raise eyebrows.
— Nat Wilson Turner (@natwilsonturner) July 22, 2026
My analysis indicates that for Oracle to satisfy OpenAI’s cloud compute requirements, it would need to build five additional mega data centers. Current interests stemming from Stargate projects remain unquantifiable, posing significant challenges to Oracle’s expectations.
Referring to the NYT’s Jeff Sommer, the Ellison media venture may nominally be overseen by David Ellison, but its foundation rests on the dwindling oracle fortune:
Money from Oracle enables the Ellison family to transition into media moguls through acquisitions. David is at the helm of Paramount and is currently embroiled in a highly contested bid for Warner Bros. Discovery despite massive existing debt burdens.
The challenges facing Oracle are unprecedented, and the winds of change are blowing. As a result, both the Ellison family and their media ambitions may also be at risk.
Legal Challenges From All Sides Slowing WBD Buy
Resistance toward this oligarchic family’s media acquisitions is rising, particularly against the backdrop of societal and political implications.
Comics Beat summarizes the precarity well:
The Warner Bros. deal presents a precarious challenge; both Paramount and Warner Bros. have recently struggled for profitability, bearing substantial existing debt while attempting to service yet another sizeable loan to proceed with Warner Bros.
Failure to finalize the acquisition swiftly leads to financial repercussions for Paramount as they face penalties linked to market volatility.
Moreover, the ongoing legal landscape complicates the merger:
Four Major Lawsuits Delaying the WBD Buy
To initiate, a coalition of twelve Democratic attorneys general is challenging the merger under the Clayton Act, arguing that it could diminish competition in film distribution and cable licensing. Additionally, lawsuits from current subscribers indicate they may face higher fees and fewer viewing options, though they are unlikely to succeed in court.
Moreover, a class action suit filed by the Writers Guild of America seeks to block the merger alongside another lawsuit alleging a clandestine agreement between the Ellisons and former President Trump for approval of the deal. These complications serve as potential stumbling blocks for their ambitious plans.
Concerns regarding the merger’s implications are not unfounded, especially as employees at Paramount express anxiety over layoffs or potential financial upheaval should the deal falter.
Conclusion:
The landscape for Oracle and its intertwined ventures in the media space grows increasingly challenging as economic pressures mount and legal hurdles arise. The Ellison family may find themselves navigating tumultuous waters, with both their financial empire and media aspirations hanging in the balance. As developments unfold, only time will tell how this story plays out amid uncertainty and change in the tech and media sectors.
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