Oracle Announces Financial Plan to Cap AI Financing and Ease Investor Concerns
Oracle announced a financial strategy to limit AI-related external financing to $20 billion through fiscal 2030 and achieve positive free cash flow by the second half of fiscal 2028. The company expects capital expenditures to peak in fiscal 2027 and 2028 before declining. This announcement aims to soothe investor anxieties regarding Oracle's heavy debt reliance and soaring infrastructure costs required to support massive cloud and AI contracts, such as those with OpenAI. By providing a clear roadmap to financial self-sufficiency, the company hopes to stabilize market confidence in its long-term growth. Oracle projects its fiscal 2030 revenue to exceed $225 billion with an adjusted operating margin of over 40%. Additionally, the company expects to reduce its net debt-to-core profit ratio below 3.5 times starting from fiscal 2029, when external financing for growth will no longer be necessary.
## BACKGROUND
Free cash flow measures the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets, reflecting its financial health and capacity for debt repayment or dividends. Capital expenditures, or CapEx, represent the funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment like data center servers.