Oracle earnings will show whether its expensive AI bet is starting to pay off

In this article ORCL Follow your favorite stocks CREATE FREE ACCOUNT watch now VIDEO 5:44 05:44 Inside Oracle's risky AI bet Tech Oracle reports third-quarter earnings on Tuesday, and it will be an unofficial test for the artificial intelligence trade. Following the announcement of a $50 billion financing plan at the beginning of February that included debt and equity, investors have been eager to understand the pace of dilution for current stockholders. "The cadence matters," said Gil Luria, equity analyst at DA Davidson, told CNBC. Of all the hyperscalers that are leaning into AI cloud computing, Oracle has had to rely the most on financing measures to fund its ambitious data center buildout plans. Its latest debt raise included a $5 billion convertible preferred offering and roughly $25 billion in senior notes at different maturities, according to a credit investor who spoke to CNBC. The deal was oversubscribed, indicating strong demand. Oracle's ability to deliver data center assets to OpenAI , its main customer, is of utmost importance to investors. Late Friday, Bloomberg reported that talks to expand its deal with OpenAI in Abilene, Texas, fell through. A source familiar with the situation told CNBC that Oracle's deal to deliver eight sites to OpenAI remains on track and on schedule. The source asked not to be named in order to discuss a confidential matter. OpenAI executive Sachin Katti later posted on X that while it contemplated expanding its presence in Abilene, it would look to other markets across the U.S. "We considered expanding it further, but ultimately chose to put that additional capacity in other locations," Katti wrote. "Today we have more than half a dozen sites under development across multiple states, including the site we're building with Oracle in Wisconsin, where the first steel beams went up just this week." Katti is in charge of spearheading OpenAI's compute infrastructure and previously held the role of AI chief and chief technology offi...