The cost of insuring Oracle's debt against the risk of default has shot up after its latest earnings reignited worries about how much the broader corporate sector is spending on AI and the borrowing surge to fund it.

Shares in Larry Ellison’s database company fell as much as 16 per cent on Thursday, before trimming its losses to close down 10.8 per cent. The cost to protect against falls in its debt also jumped. The move came as Oracle reported revenues of $16.1bn in the last quarter, up 14 per cent from the previous year but below analysts’ estimates.

Three months after Larry Ellison briefly became the world’s richest person, a historic slide in Oracle Corp. shares sent his net worth plunging by $24.9 billion.

Oracle shares slid more than 6% on Wednesday in after-hours trading, after the software giant posted revenue results that missed expectations.

There are two comforts for Oracle investors. First, the delay between money out and money in is small. Oracle’s share of data centre construction — servers and the like — tends to go in just a couple of months before the customer starts using it, unlike the bricks and mortar around them.

A measure of Oracle Corp.’s credit risk climbed on Wednesday after the database company posted a jump in spending on data centers and other equipment, raising fresh doubts about how quickly it can generate profit from its huge investments in artificial intelligence.

Alphabet, Amazon, Meta, and Microsoft—and, more recently, Oracle have poured money into data centres crammed full of pricey AI chips. The combined capital expenditure of the five tech companies reached $313bn in the 12 months to the end of June,

A lot has happened in the three months since the world learned of Oracle’s deal to provide $300 billion worth of artificial-intelligence computing services to OpenAI. That was just one in a string of expensive deals signed by the ChatGPT parent, which currently generates less than $20 billion in annual revenue.