The higher costs have stalled deals. “Multiple Oracle data-center leases that were under negotiation with private operators struggled to secure financing, in turn preventing Oracle from securing the data-center capacity via a lease,” the report said. Without financing, private data-center operators can’t build the facilities Oracle needs, creating a bottleneck in the company’s infrastructure rollout.
Oracle has already tapped debt markets heavily, raising approximately $58 billion in just two months: $38 billion for facilities in Texas and Wisconsin, and $20 billion for New Mexico. But that represents only a fraction of what the company ultimately needs, and US banks are increasingly reluctant to provide more.
Asian banks have stepped in where US lenders are retreating, remaining willing to lend at premium rates as they seek exposure to AI infrastructure growth. That provides Oracle an alternative path for international expansion but doesn’t solve the company’s US capacity challenges. TD Cowen added that the US financing constraints raise fundamental questions about whether Oracle can grow revenue if it cannot secure the data-center capacity its customers are expecting.
Scrambling for solutions
Faced with these constraints, Oracle is pursuing multiple strategies to reduce its capital needs. The company has begun requiring 40% upfront deposits from new customers, TD Cowen said, effectively asking clients to help fund the infrastructure buildout. It’s also exploring “bring your own chip” (BYOC) arrangements where customers would supply their own hardware, shifting capital requirements off Oracle’s books.
TD Cowen said some combination of BYOC and workforce reductions represent the most likely path forward, since BYOC would directly address the capital expenditure challenge while job cuts would improve cash flow. But both options carry risks. BYOC could require renegotiating existing contracts that assume Oracle provides the hardware, while major layoffs could affect the company’s ability to execute its infrastructure plans.
The potential workforce reduction would be Oracle’s largest in recent years. The company cut an estimated 10,000 jobs in late 2025 as part of a $1.6 billion restructuring plan. Oracle has also repeatedly reduced headcount at Cerner since acquiring the healthcare technology company, including layoffs in 2023 following problems with a Veterans Affairs contract.
