Larry Ellison Bet Big on Trump, Israel and the AI Boom, Now Oracle’s Massive Debt Gamble Is Starting to Bite
Larry Ellison has spent the past several years assembling one of the most extraordinary concentrations of money, technology, media and political influence in modern American business. The Oracle co-founder moved closer to Donald Trump, positioned his company at the center of America’s artificial intelligence infrastructure boom, watched his family expand aggressively into Hollywood and maintained longstanding ties to Israel and Israeli Prime Minister Benjamin Netanyahu. As Oracle’s stock exploded during the AI frenzy, Ellison’s personal fortune briefly climbed into territory occupied by only a handful of people in human history.
Now some of those bets are becoming enormously expensive. A new MS NOW report, provocatively titled “AI bubble about to COLLAPSE? Exposé on MAGA ally Larry Ellison’s DEBT BOMB,” is drawing attention to something Wall Street has increasingly been discussing for months: Oracle is spending and borrowing at an astonishing rate to build the infrastructure required for the artificial intelligence boom. Oracle spent approximately $55.7 billion on capital expenditures during fiscal 2026, compared with roughly $21.2 billion the previous year. The company generated a record $32 billion in operating cash flow, but after its extraordinary infrastructure spending, free cash flow fell to approximately negative $23.7 billion.
Oracle also says it raised approximately $43 billion in debt financing during fiscal 2026, along with $5 billion in equity, and expects to raise roughly another $40 billion through a combination of debt and equity during fiscal 2027. Those are serious numbers, but they do not mean Larry Ellison is bankrupt. They don’t mean Oracle is preparing for bankruptcy either. What they show is that Ellison has transformed Oracle into one of the most aggressive financial bets on artificial intelligence anywhere in corporate America. If the AI infrastructure boom produces the extraordinary revenue Wall Street expects, Ellison could once again look brilliant. If it doesn’t, the downside could become extremely expensive.
Larry Ellison Is Not Bankrupt
This needs to be established immediately because the online conversation has moved considerably faster than the financial facts. There is currently no credible evidence that Larry Ellison is personally bankrupt or preparing for bankruptcy. Forbes continues to estimate his fortune well above $100 billion, although his net worth can fluctuate dramatically because such an enormous portion of his wealth is tied to Oracle stock.
That distinction matters. A collapse in Oracle’s stock can erase tens of billions of dollars from Ellison’s estimated fortune remarkably quickly without leaving him remotely close to insolvency. Ellison could theoretically lose $100 billion in paper wealth and still remain one of the wealthiest people on Earth. So the viral version of this story, that Larry Ellison is going bankrupt, is not supported by the available evidence.
The real story is considerably more interesting. Oracle is taking an enormous leveraged gamble on AI at precisely the moment investors are becoming increasingly nervous about how much money the technology industry is borrowing and spending to build artificial intelligence infrastructure.
Oracle Is Spending Money at an Extraordinary Rate
Oracle’s fiscal 2026 financial statements demonstrate just how radically the company’s economics have changed. Revenue increased 17% to a record $67.4 billion. Cloud revenue jumped 39% to approximately $34 billion. GAAP operating income reached $20.6 billion, while net income available to common shareholders reached approximately $17 billion. Those are not the financial results of a dying company.
Underneath those numbers, however, sits the figure attracting Wall Street’s attention. Oracle spent approximately $55.7 billion on capital expenditures during the year, enough to overwhelm the company’s record operating cash generation and push annual free cash flow to roughly negative $23.7 billion. One year earlier, Oracle’s trailing annual capital expenditures were about $21.2 billion. In other words, Oracle’s annual capital spending more than doubled as Ellison and company raced to build data centers, acquire computing infrastructure and position Oracle Cloud Infrastructure as one of the foundational platforms powering the AI economy.
Oracle isn’t merely participating in the artificial intelligence boom. It is betting tens of billions of dollars that demand will continue expanding fast enough to justify an infrastructure buildout of historic proportions.
Oracle Borrowed $43 Billion in One Year
Then there is the financing. Oracle says it raised approximately $43 billion in debt during fiscal 2026 and another $5 billion through equity financing. The company isn’t finished. For fiscal 2027, Oracle expects to raise approximately another $40 billion through debt and equity, including a previously announced $20 billion at-the-market equity program.
That doesn’t automatically make Oracle financially reckless. Massive infrastructure businesses routinely borrow money to finance assets expected to generate revenue for years or decades. The question is whether those assets ultimately produce enough money to justify what was spent building them.
That is where the AI debate becomes uncomfortable. Oracle isn’t spending more than $50 billion annually because its traditional database business suddenly requires an endless collection of expensive new data centers and AI chips. It is building for a future in which demand for artificial intelligence continues exploding. If that future arrives, Ellison could look visionary. If it doesn’t, Oracle will still have the financing obligations.
The Bull Case for Oracle Is Also Enormous
Anyone writing Oracle’s obituary right now is leaving out a gigantic piece of the story: demand. Oracle ended fiscal 2026 with approximately $638 billion in remaining performance obligations, or RPO, essentially contracted future revenue that has not yet been recognized. That figure increased an extraordinary 363% year over year.
Oracle has also said much of its recent RPO growth comes from massive AI contracts where customers either prepaid Oracle for GPUs or supplied the GPUs themselves. According to the company, those prepaid and customer-supplied hardware commitments total approximately $75 billion. That materially changes the risk calculation because Oracle does not necessarily have to finance every dollar of its AI expansion itself.
This is why calling Oracle an impending bankruptcy story would be premature. The company isn’t simply constructing empty data centers and praying customers eventually appear. It already has enormous contractual commitments. The bearish argument is that those commitments could prove less profitable than investors expect, take years to convert into cash or become problematic if the economics of AI infrastructure deteriorate. The bullish argument is that Oracle has hundreds of billions of dollars in contracted business and is spending aggressively because customers are demanding capacity faster than the company can currently provide it.
Both sides have a legitimate case.
Wall Street Is Starting to Price the Risk
What has changed is that investors are no longer treating every dollar spent on artificial intelligence as automatically brilliant. Reuters recently reported increased trading in credit default swaps connected to companies making enormous AI investments as investors seek protection against potential credit deterioration. Oracle has attracted particular attention following pressure on its credit profile.
That should not be confused with Wall Street predicting an imminent Oracle default. Credit default swap markets can be thin, price movements can become exaggerated and the actual probability of a catastrophic credit event remains comparatively low. The important development is psychological. Investors are beginning to ask harder questions about how much money technology companies are borrowing, how quickly AI infrastructure will produce adequate returns and what happens if revenue expectations prove overly optimistic. That’s a much healthier question than the almost unquestioning AI enthusiasm that dominated markets earlier in the boom.
The Entire AI Industry Has a Spending Problem
Oracle isn’t operating in isolation. The artificial intelligence infrastructure race has become one of the largest capital expenditure booms in corporate history. Amazon, Microsoft, Meta, Alphabet and other technology giants are collectively committing staggering amounts of money to data centers, chips, electricity generation, cooling systems, networking equipment and long-term infrastructure agreements.
A Wall Street Journal analysis estimated that major technology companies have accumulated trillions of dollars in additional long-term AI-related commitments beyond the enormous capital expenditures already visible on their financial statements. That doesn’t mean there is a multitrillion-dollar bankruptcy bomb waiting to explode. It means the AI revolution has become extraordinarily capital intensive, and the industry now needs AI revenue to grow fast enough to justify infrastructure commitments stretching years into the future.
If artificial intelligence becomes as economically transformative as its biggest proponents believe, these investments could ultimately look cheap. If revenue falls dramatically short of expectations, the financial hangover could be spectacular.
Oracle’s OpenAI Relationship Raises the Stakes
Oracle’s strategy is deeply connected to OpenAI and the massive infrastructure buildout surrounding Stargate. In January 2025, Trump appeared at the White House alongside Ellison, OpenAI CEO Sam Altman and SoftBank CEO Masayoshi Son to announce Stargate, a project promising as much as $500 billion in American artificial intelligence infrastructure investment.
Trump presented the announcement as evidence that his return to office had unleashed enormous investment in the United States. Subsequent reporting indicated that planning for the infrastructure initiative had been underway before Trump’s 2024 election victory, but the White House appearance nevertheless symbolized something important about Ellison’s increasingly powerful position.
Ellison was no longer merely a technology billionaire. He was standing beside the president of the United States as one of the businessmen positioned to build the physical infrastructure of America’s AI future.
Ellison Also Made a Major Political Bet on Trump
Ellison’s relationship with Trump has become considerably deeper than a few White House photo opportunities. The Wall Street Journal reported that Ellison donated approximately $45 million to a pro-Trump political nonprofit during the 2024 election cycle, helping bring him deeper into Trump’s political orbit. The newspaper also reported that Ellison and Trump communicate by phone and that Ellison has visited Mar-a-Lago.
There is even a geographical connection. Ellison owns an enormous oceanfront estate in Manalapan, Florida, purchased for approximately $173 million in 2022, placing him just down the coast from Trump’s Palm Beach club.
For Ellison, the Trump relationship intersects almost perfectly with his business empire. Trump wants enormous American AI infrastructure, and Oracle wants to build it. Oracle has been involved in discussions surrounding TikTok’s American operations. The Ellison family is simultaneously expanding aggressively into American entertainment and media, industries where major transactions can depend on federal regulatory decisions.
None of that proves improper conduct. But the overlapping interests make Ellison’s political relationship with Trump considerably more consequential than the typical billionaire endorsement.
Then There Is Israel
Ellison has also maintained a longstanding and unusually strong relationship with Israel. His support predates the current Trump administration by years and includes public connections to Israeli Prime Minister Benjamin Netanyahu and substantial philanthropic support for organizations associated with Israel.
In 2014, Ellison pledged $9 million to Friends of the Israel Defense Forces, becoming the largest donor at a Los Angeles fundraising gala that raised more than $30 million. His relationship with Netanyahu has also been widely documented.
Those connections have become increasingly politically significant as Israel’s military actions and America’s support for the Israeli government have become deeply polarizing issues inside the United States. Ellison’s political universe therefore contains several overlapping commitments: Trump, Israel, artificial-intelligence infrastructure and an increasingly powerful family media empire. That is an extraordinary concentration of money and influence surrounding one billionaire.
The Ellison Family Is Making a Massive Media Gamble
Then there is Hollywood. Larry Ellison’s son David Ellison has become a major entertainment power broker through Skydance and Paramount, while the family has pursued increasingly ambitious consolidation across the media industry.
The numbers associated with those ambitions are enormous. Public securities filings connected with proposed transactions have shown tens of billions of dollars in financing commitments, while Larry Ellison himself has provided significant financial backing and guarantees connected to his son’s expansion strategy.
That is where the broader Ellison story becomes especially fascinating. Oracle is borrowing heavily to finance AI. The Ellison family is simultaneously committing enormous amounts of capital toward media consolidation. Larry Ellison’s personal wealth remains heavily concentrated in Oracle stock. His political relationships intersect with industries affected by federal policy and regulation.
That doesn’t mean the empire is collapsing. It means the financial pieces are more interconnected than they may initially appear.
Oracle Is Cutting Jobs While Spending Billions on AI
There is another uncomfortable piece of the story. Oracle has been cutting employees while simultaneously pouring unprecedented sums into AI infrastructure. Recent reporting has described substantial workforce reductions as management attempts to control expenses while redirecting capital toward data centers and artificial-intelligence capacity.
The juxtaposition is remarkable. Oracle generated record revenue. Cloud demand is booming. The company has hundreds of billions of dollars in contracted obligations. Yet workers can still lose their jobs while tens of billions flow toward AI infrastructure.
From management’s perspective, the logic is straightforward: move capital from slower-growing operations toward infrastructure expected to generate enormous future returns. For workers, the lesson is considerably less comforting. The AI boom may create enormous corporate wealth without distributing those benefits evenly across the people who helped build the companies now financing it.
What Could Actually Break the Ellison Bet?
The real danger isn’t that Oracle suddenly runs out of money tomorrow. The more plausible risk is a chain reaction. AI revenue growth slows. Customers become less willing to sign enormous infrastructure contracts. Cloud pricing falls as competition intensifies. Data center utilization comes in below expectations. The useful life of expensive GPUs shortens as newer chips arrive. Power and construction costs remain elevated. Oracle’s margins disappoint. Investors demand higher yields to lend the company money. Oracle’s stock declines, taking a large portion of Ellison’s paper fortune with it.
At the same time, the Ellison family could remain committed to enormous media investments and financial guarantees. None of those developments individually creates bankruptcy. Together, however, they could turn what currently looks like empire building into an extremely expensive balance-sheet problem.
That is the real “debt bomb” underneath the viral headlines.
There Is Another Scenario: Ellison Wins Again
There is a reason Larry Ellison became one of the wealthiest people alive. He has made enormous bets before. Oracle survived the dot-com collapse, transformed itself through aggressive acquisitions and repeatedly made moves that looked dangerous before becoming enormously profitable.
The bullish scenario is straightforward. AI demand continues exploding. Oracle converts its enormous backlog into revenue. Its data centers fill. Cloud margins expand. Capital spending eventually slows because much of the infrastructure has already been constructed. Free cash flow rebounds. Oracle becomes a genuine hyperscale competitor to Amazon Web Services, Microsoft Azure and Google Cloud.
Under that scenario, today’s debt panic could look absurd five years from now. Ellison could emerge owning an enormous piece of the AI infrastructure economy while his family simultaneously controls one of America’s most powerful entertainment and media companies.
That is exactly why he is willing to take the risk.
Larry Ellison Isn’t Bankrupt, He’s Making One of the Biggest Bets in Corporate America
The evidence does not support saying Larry Ellison is going bankrupt. Oracle remains enormously profitable, generated tens of billions of dollars in operating cash flow and possesses a massive backlog of contracted business. Ellison himself remains one of the wealthiest people on Earth.
But dismissing the financial concerns entirely would be equally foolish. Oracle’s capital expenditures exploded to approximately $55.7 billion during fiscal 2026. Free cash flow fell deep into negative territory. The company raised approximately $43 billion in debt during the year and expects to raise tens of billions more through debt and equity. Meanwhile, the Ellison family is simultaneously pursuing enormous media investments while Larry Ellison maintains major financial exposure to Oracle stock.
Ellison has spent decades being one of the most aggressive gamblers in American capitalism. Now he has chips spread across artificial intelligence, cloud computing, Hollywood, American politics and one of America’s most consequential foreign alliances.
Maybe it works. If AI becomes the economic revolution Ellison believes it will be, Oracle’s enormous infrastructure buildout could look visionary. If the AI boom cracks, the economics become considerably uglier. That is the real story beneath the bankruptcy rumors. Larry Ellison isn’t broke. He has simply made one of the biggest financial bets of his career at precisely the moment Wall Street is beginning to ask what happens if the AI boom doesn’t go according to plan.
Sources
MS NOW — “AI Bubble About to Collapse? Exposé on MAGA Ally Larry Ellison’s Debt Bomb”
Oracle — Fiscal 2026 Financial Results
Oracle Investor Relations — FY2026 Earnings and Cash Flow
Reuters — AI Debt and Credit Risk Coverage
The Wall Street Journal — Larry Ellison, Trump and Political Donations
The Wall Street Journal — AI Infrastructure Spending
Associated Press — Trump, Oracle, OpenAI and Stargate
The Washington Post — Stargate AI Infrastructure Reporting
U.S. Securities and Exchange Commission — Ellison and Paramount Filings
Paramount Investor Relations — Corporate Transaction Information
