Larry Ellison's Bet on AI

Investment Analysis Clubs Macro Economic Trends and Risks
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https://www.nytimes.com/2026/07/31/magazine/larry-ellison-ai-oracle.html?unlocked_article_code=1.11A.vzkn.HCHDjwhSAmRQ&smid=url-share

Larry Ellison Bet It All on the A.I. Boom. Will He Be the Face of the A.I. Bubble?

Will Oracle be the Lehman Bros of the AI boom?

Ellison, a founding father of Silicon Valley and the last of his generation still in the game, was desperate to avoid getting left behind. He’d moved quickly and aggressively — some might even say recklessly — to turn Oracle into a “hyperscaler,” one of the handful of companies providing the critical infrastructure that would power the A.I. boom.

Is Larry out over his skis?
Oracle’s bonds have been downgraded to one notch above junk status, with a credit rating of BBB- due to significant cash flow deficits and heavy reliance on AI-related investments.

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As noted before borrowing to fund AI investment will pay off handsomely if it succeeds as bond interest is fixed. Equity owners will see max gains. Earning will not be diluted by mega new share issues.

Similarly Oracle’s long history of database software for business gives them excellent business contacts. They can be way ahead in bringing AI to businesses.

Still it’s a major risk if AI fails to prosper.