Oracle stock plunges 12% on AI jitters, Larry Ellison’s net worth down $34B

Oracle Stock Plummets, Larry Ellison’s Fortune Takes a Hit

Oracle’s stock fell more than 12% on Thursday due to concerns over the company’s massive AI spending, resulting in a $30 billion drop in co-founder Larry Ellison’s fortune.

The Texas-based tech company saw its stock drop from $223 to $194 per share, leading to a $90 billion loss in market capitalization.

As a result, Ellison’s net worth decreased to $244 billion, down from $276 billion, according to Forbes.

Ellison, who owns around 40% of Oracle shares, slipped to third place on the list of the world’s richest individuals, behind Elon Musk and Larry Page.

Oracle’s stock decline also impacted the tech sector, causing a selloff in companies like Nvidia, AMD, Micron, Broadcom, and Arm.

Despite the tech sector downturn, the broader market saw positive movement with the Dow Jones Industrial Average gaining around 600 points.

Investor concerns about Oracle’s high debt levels related to its AI investments led to a spike in credit-default swaps, indicating worries about possible default.

Earlier this year, Oracle secured a deal to provide $300 billion in cloud computing services to OpenAI, a company valued at $500 billion but still operating at a loss.

OpenAI’s ambitious AI spending plans, exceeding $1 trillion by 2030, have raised questions about its financial sustainability.

Despite the challenges, Oracle remains committed to its AI strategy with $523 billion in business commitments awaiting fulfillment.

Analysts like Dan Ives of WedBush Securities remain optimistic about Oracle’s future and its AI buildout strategy.

Overall, despite the stock dip, Oracle continues to have supporters who believe in its long-term potential.