The strain inside the AI boom’s biggest infrastructure bet has reached a courtroom. Oracle’s own investors are suing, saying the company hid how shaky its $300bn deal with OpenAI really was.
A Michigan public pension fund, the City of Sterling Heights Police & Fire Retirement System, filed the class action on Wednesday in a Tennessee state court, as Courthouse News reported. It targets Oracle’s $25bn note sale from February, and names co-founder Larry Ellison, former chief executive Safra Catz, the current co-CEOs, and a long row of underwriting banks.
The missing disclosure
The claim runs narrow but sharp. Before selling the notes, Oracle told investors its backlog of booked-but-unfulfilled orders had exploded. That figure, known as remaining performance obligations, had jumped from about $97bn to more than $523bn in a year. Almost all of the growth, the suit says, traced to a single customer: OpenAI.
What Oracle did not disclose, the pension argues, is that OpenAI had missed its own revenue and user targets. It also says OpenAI’s finance chief had privately raised doubts about whether the company could pay for all the cloud computing it had promised to buy. The registration statement, the complaint says, “contained no such disclosures.”
