Larry Ellison cancels plan to sell Oracle stock worth up to $7.5 billion

Oracle (ORCL) shares fell 5.5% after Bloomberg reported its AI campus in New Mexico may face delays due to a gas pipeline issue. Oracle sent a force majeure notice to the developer, a unit of Blue Owl Capital (OWL), citing potential delays. The project, powered by trucked gas initially, faces challenges due to high costs and logistical limits. Oracle's AI cloud demand is outpacing supply, with a $664 billion backlog, but its stock is down 52% over the past year.

Oracle (ORCL) fell 5.5% to $135.69 after OpenAI's revenue run-rate was clarified at $50B, down from rumors of $68B-$70B. Investors reacted to the downward adjustment, despite OpenAI's strong fundamentals. Oracle's high debt and infrastructure challenges added to pressure, with its forward P/E ratio shifting to upper-teens/low-20s.

Oracle reportedly agreed to a $7B deal with Tencent for access to 100,000 AI chips over five years, housed in Southeast Asian data centers. The arrangement avoids U.S. chip export restrictions to China. Neither company confirmed the agreement, but it highlights regulatory challenges and Tencent's need for advanced computing power. Tencent aims to use the capacity for AI model training and potentially inference, supporting its expanding AI services.

Oracle shares fell 5% after OpenAI clarified its annualized revenue at $50B, below prior reports of $68B. Oracle, a major cloud provider to OpenAI, is investing heavily in AI infrastructure, with capital spending rising to $28.5B in Q2. The company is exploring debt financing to support its AI investments, with long-term debt nearing $160B. OpenAI reported 77% total run rate growth in Q3, but concerns about AI revenue sustainability weighed on related stocks.

Oracle reported a $664 billion contract backlog, up from $455 billion a year ago, with only 13% expected to convert to revenue in the next year. The increase was driven by large cloud contracts. Oracle has a $300 billion computing deal with OpenAI starting in 2027, but its realization depends on OpenAI's revenue growth. Meanwhile, Broadcom, Oracle, and SpaceX are seeking significant financing for AI chip purchases.

Oracle Health's 2025 breach of its legacy Cerner system exposed data of 20M people, including 3M Texans, per Texas AG. Affected data included SSNs, addresses, and medical info. The breach was linked to unsecured legacy servers. Oracle faces a federal class-action lawsuit for alleged negligence and delayed notifications, with a judge ruling that healthcare providers share liability. Oracle has not publicly commented.