Oracle Founder Larry Ellison to Sell Up to $7.5 Billion in Stock

Oracle co-founder Larry Ellison plans to sell up to $7.5 billion worth of his company’s stock.

According to the Financial Times, Ellison will sell up to 50 million shares of Oracle by the end of October as part of a pre-arranged trading plan. Based on the closing price of $150 per share on September 11, the sale could reach a maximum of $7.5 billion.

Despite this sale, Ellison is expected to remain Oracle's largest individual shareholder, holding approximately 40% of the company's stock. Last September, he also used 346 million shares of Oracle as collateral for personal loans.

Ellison's stock sale comes at a time when Oracle is investing heavily in expanding its AI infrastructure business. Traditionally focused on database software, Oracle has been rapidly increasing its investments in data centers and cloud infrastructure to meet the growing computing demands of AI companies.

Ellison has been at the forefront of this AI infrastructure expansion. Last year, he unveiled a $500 billion AI infrastructure project called 'Stargate' alongside Sam Altman, CEO of OpenAI, and Masayoshi Son, chairman of SoftBank Group, at the White House. In September, Oracle agreed to provide OpenAI with $300 billion worth of data center capacity.

The growth of the AI infrastructure business has been significant. Oracle reported on September 10 that its cloud infrastructure (OCI) revenue for the first quarter of the fiscal year reached $7.4 billion, a 121% increase from the same period last year, surpassing market expectations of $7.19 billion. Overall revenue rose by 30% to $19.3 billion, with the company adding 850 megawatts (MW) of data center capacity in the quarter.

As the business expands, the financial burden is also increasing. Oracle has been raising substantial debt and issuing new shares to fund data center construction. Recently, it completed a previously announced $20 billion capital increase. Some projects have faced delays due to permitting and regulatory issues, raising concerns about investment costs and profitability.

Oracle is also undergoing restructuring to cut costs. The company has allocated an additional $700 million for restructuring expenses, including severance, over the next year. While it continues to pursue aggressive AI infrastructure investments, it must also manage the increased financial pressures and investment costs.

Oracle's stock price has fallen significantly since reaching a peak in June, driven by concerns over funding and data center construction costs. However, the recent announcement of better-than-expected cloud performance has alleviated some of these investment concerns.