(Bloomberg) — Oracle Corp. was sued by bondholders who claim that the database giant failed to disclose plans to raise more debt when it borrowed $18 billion in one of 2025’s largest corporate bond offerings.
The Ohio Carpenters’ Pension Plan, which was among bondholders that bought bonds issued in September, claims that Oracle didn’t tell investors that it needed to raise a “significant amount of additional debt” to finance its artificial intelligence infrastructure, according to a lawsuit filed in a New York state court Wednesday.
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Several weeks after issuing the notes, Bloomberg reported that banks were also providing a $38 billion debt offering to help fund data centers in Texas and Wisconsin tied to Oracle. As a result of the additional debt, Oracle’s bonds began to trade with yields and spreads similar to lower-rated issuers as concerns about Oracle’s credit risk grew.
“The offering documents were false and misleading and omitted to state that, at the time of the offering, Oracle was organizing to raise that additional debt, which would ultimately bring the creditworthiness of these bonds into question,” according to the lawsuit.
The lawsuit underscores the disputes that can arise as big tech companies gear up to invest trillions of dollars in artificial intelligence infrastructure and borrow heavily to fund those investments. Paper losses for investors that bought the high-grade notes in September totals more than $1.1 billion across six-tranches as of Thursday, according to Bloomberg News analysis.
“This is a timely case, and we look forward to pursuing this lawsuit on behalf of investors who suffered significant financial losses and damages,” David Scott, a lawyer at the firm representing the bondholders, said in an emailed statement.
Oracle Chairman and founder Larry Ellison and Wall street banks that managed the bond sale, including Bank of America Corp., Citigroup Inc., Deutsche Bank AG., Goldman Sachs Group Inc., HSBC Holdings Plc and JPMorgan Chase & Co., are also named in the lawsuit.
Oracle and the banks all declined to comment on the lawsuit.
Oracle is involved in a massive data center build-out to power AI work for OpenAI and has taken out significant sums of debt and committed to leasing multiple data center sites. The company said last month that it now expects capital expenditures will reach about $50 billion in the fiscal year ending in May 2026 — a $15 billion increase from its September forecast.
