oracle -- ai infrastructure capex securities fraud
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case overview
a securities class action was filed against oracle corporation on february 3, 2026, alleging the company misled investors about its ai infrastructure strategy by touting massive capital expenditures as a path to rapid revenue growth — when management knew or should have known that spending would far outpace revenue.
| Case | Barrows v. Oracle Corporation, No. 1:26-cv-00127-JLH |
| Court | U.S. District Court, District of Delaware |
| Filed | February 3, 2026 |
| Class Period | June 12, 2025 — December 16, 2025 |
| Lead Plaintiff Deadline | April 6, 2026 |
| Lead Counsel | Kessler Topaz Meltzer & Check, LLP |
| Status | Active |
allegations
the complaint alleges violations of sections 10(b) and 20(a) of the securities exchange act of 1934. specifically:
- capex/revenue mismatch: oracle misrepresented that its ai infrastructure strategy would result in massive capex increases without equivalent near-term revenue growth
- debt and credit risk concealment: the substantially increased spending created serious risks involving oracle’s debt, credit rating, free cash flow, and ability to fund projects
- misleading forward-looking statements: management represented that increased spending would “rapidly convert into revenue and profit growth,” which plaintiffs allege was false
key events
september 25, 2025
oracle announced a $300 billion, five-year contract to supply openai with computing power. rothschild & co. redburn simultaneously initiated coverage at “sell,” warning that promised massive revenues from ai infrastructure were “unlikely to materialize.” stock declined 5.5%.
december 10, 2025
oracle reported q2 fy2026 results:
- revenue growth below analyst consensus
- quarterly capex well above estimates
- negative free cash flow exceeding $10 billion
- cfo projected fy2026 capex of $50 billion — $15 billion higher than september 2025 projection and up to $25 billion higher than june 2025 projection
stock dropped $24.16/share (nearly 11%), from $223.01 to $198.85.
december 12, 2025
bloomberg reported oracle pushed back openai data center completion dates from 2027 to 2028 due to labor and material shortages.
december 17, 2025
the financial times reported that blue owl capital — the primary financial backer for oracle’s largest data center projects — backed out of funding a $10 billion oracle data center intended to serve openai, citing concerns about spending commitments and rising debt.
oracle’s quarterly report also revealed $248 billion of additional lease commitments substantially related to data centers and cloud capacity arrangements — described as a “bombshell disclosure” by creditsights analysts.
stock fell an additional 5.4%.
significance
this case represents one of the clearest examples of the ai infrastructure capex litigation pattern: a company makes aggressive forward-looking statements about ai-driven revenue growth, ramps spending dramatically, and then fails to deliver results on the promised timeline.
oracle’s $248 billion in off-balance-sheet lease commitments — nearly unheard of in the tech sector — makes the case particularly notable. combined with the bondholder class action, oracle faces litigation from both equity and debt investors over its ai data center strategy.
sources
- d&o diary: oracle hit with massive ai infrastructure-related securities suit
- kessler topaz: oracle securities fraud class action
- robbins geller: oracle class action
last updated: february 22, 2026