S&P downgrades Oracle to BBB – only one notch above junk level

S&P Global downgraded Oracle's credit rating from BBB to BBB-, the lowest investment-grade level, citing the company's massive investments in AI infrastructure—projected at $90-95 billion for fiscal 2027—which are creating a $42 billion free cash flow deficit. The downgrade reflects significant risk, particularly Oracle's heavy dependence on OpenAI, which accounts for roughly half of its $638 billion in promised but undelivered services, combined with the company's weaker competitive position compared to other hyperscalers like Microsoft and Amazon.