Oracle co-founder Larry Ellison has slid to eighth on the rich list after Oracle’s AI spending story spooked investors.
According to Forbes less than a year ago, Ellison was the world’s richest man and 10 weeks ago, he was still second, which probably made the yacht fleet feel safe enough.
Forbes now says Ellison has dropped to eighth, behind Nvidia chief executive Jensen Huang. Ellison’s net worth is estimated at $192.6 billion, down from $ 296.6 billion.
Oracle shares plunged roughly 54 per cent, from just over $250 on 1 June to $114.50 on 28 July. The shares have since rebounded a bit, reaching $150.52 as of Friday.
The slide followed Oracle’s announcement that it expected to raise $40 billion through debt and equity financing. Capital expenditure surged 162 per cent to $55.7 billion, with spending expected to top $95 billion by fiscal 2027.
eMarketer analyst Jacob Bourne told Reuters there were broader worries about how Oracle would fund its spending to match revenue projections. Bank of America analysts warned that more than 50 per cent of Oracle’s remaining performance obligation comes from OpenAI.
Melius Research analysts wrote last month that Oracle’s spending plans may not hold if OpenAI or Anthropic demands more computing capacity. S&P Global downgraded Oracle’s credit rating in July, saying the firm’s “rapidly expanding” AI infrastructure business could pay off. The ratings outfit warned that it may be too expensive and could weaken Oracle’s financial position in the meantime.
Oracle’s market valuation has fallen by $443 billion since peaking at $877.1 billion in September. By Friday, the database giant was worth $433.5 billion, which is still enormous but rather less swaggering.
Oracle was once pitched as a likely winner from the AI infrastructure buildout. Investors now seem less thrilled by a company taking on huge financial risk to feed the AI furnace.
The cocaine nose jobs of Wall Street have warned that mega-cap tech firms may be spending too much to chase AI demand. Amazon expects to spend more than $200 billion, which makes even Oracle’s bill look only slightly unhinged.
Oracle’s backlog has ballooned to $638 billion, but more than half is reportedly tied to OpenAI. Some analysts have warned that much of that cash may not be guaranteed, which rather dents the magic-money-machine pitch.
