Is Oracle's Debt Level Getting Crazy? There's A Method To This Madness.

We know data centers are important, but is Oracle aspiring to be the AT&T of the future? No, Oracle sees the future - they're not a "software vendor" but a "token generation" vendor.

I just listened to Oracle’s latest financial statements and this company is doing some strange things. As of January of 2026 Oracle now has $364 billion in long term debt (that includes long term leases) largely to build data centers for Stargate, the AI infrastructure for OpenAI.

While Oracle’s cloud “revenues” are up 34%, the debt level went up by 44%, indicating that Oracle is going far deeper into debt. Just for comparison I compared this massive debt load with that of Microsoft, Meta, Google, and just for kicks, AT&T.

Here’s what it looks like.

In other words, Oracle is leveraging themselves up to a debt level higher than the legacy, slow-growing phone company AT&T. I’m not sure what they’re up to, but now I understand why Michael Burry has been shorting the stock.

(Financial results here. The CFO spent a lot of time talking about “how fast” they can monetize data center buildout.)

I’m not a financial analyst, rather I cover Oracle as an HCM platform provider. It appears to me the company is quickly shifting to an IT infrastructure company, and I presume they expect this to grow more quickly over time. But to incur this level of debt to build commodity-like data and energy feels a little odd to me.

While I haven’t talked with Larry Ellison about this, here’s what I think is going on.

Oracle sees the future: packaged software, as profitable as it may be, is going to be a slowing and perhaps declining market. New AI tools like Claude Code can build agents, which can be coupled together into what we call Superagents, by almost any business professional.

Fast forward a year or two and what happens to the big application vendors like Oracle, Salesforce, and Workday? While their market doesn’t disappear, their growth slows and they wake up one day and realize “we aren’t in the software business, we’re in the software enabling business.”

In other words, Oracle sees that its massive corporate customer base is going to be “building code” with Oracle tools, not “buying apps.” And that means Oracle is in the “token generation business” now, selling compute not software.

I see this coming. Maybe Larry is just smarter than the rest of us, he’s been right before.

(Listen to my recent podcast on “building agents at work” for more detail.)