Oracle may cut 30,000 jobs and sell Cerner to fund $156 billion OpenAI deal

What you should know

• The report: Investment bank TD Cowen claims that Oracle is exploring “multiple avenues” to finance the massive expansion of its AI data center, including cutting 20,000 to 30,000 jobs and the possible sale of its health technology unit Cerner Register Reports.
• The cause: The financial pressure comes from Oracle’s $300 billion contract with OpenAI, which requires an estimated $156 billion in capital spending on GPUs and infrastructure – a burden that has spooked U.S. bond investors.
• The indicators: Risk indicators flash red. Oracle’s credit default swap (CDS) spreads have tripled, and the company is now reportedly requiring some customers to pay 40% up front to ensure cash flow.

The $156 billion bill

The root of the problem lies in the sheer size of the infrastructure required. TD Cowen estimates that fulfilling the OpenAI contract alone will require $156 billion in capital expenditures to procure around 3 million GPUs and related IT equipment.

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