Oracle (ORCL, Financials), the enterprise software and cloud infrastructure company, could be required to provide more than $7 billion in collateral for its planned Wisconsin data center after state regulators upheld utility credit requirements.
According to the Financial Times, the Public Service Commission of Wisconsin declined to reconsider rules requiring utility provider We Energies to obtain financial security from Oracle before supplying power to the project.
The requirement could force Oracle to post a $7 billion letter of credit or other collateral, with annual carrying costs estimated at more than $100 million.
The Port Washington facility is expected to consume nearly one gigawatt of electricity and forms part of Oracle's effort to support its reported $300 billion cloud computing agreement with OpenAI.
Under We Energies' tariff, very large customers with an S&P credit rating below A- must provide collateral to cover the cost of new power plants and transmission infrastructure built specifically for their facilities.
The ruling adds another financial challenge as Oracle continues to expand its AI cloud business through heavy capital investment and increased borrowing.
Investors will now watch whether the company can resolve the financing requirements without slowing construction of one of its largest AI infrastructure projects.