Oracle is negotiating with Apollo and Goldman Sachs to finance a large purchase of AI chips through an off-balance-sheet-style leasing structure, according to a Wall Street Journal report, as the company's total debt reached $169.1 billion in August 2026.

The likely structure: investors would fund a separate company that buys the chips and leases them to Oracle over time. No amount has been reported, and Oracle remains in talks with other partners. For scale, the WSJ noted that Nvidia chips for a single 1-gigawatt data center cost tens of billions of dollars.

Why does Oracle want the debt somewhere else?

Oracle's total debt has climbed from $99.5 billion in November 2024 to $169.1 billion in August 2026, set against $37.1 billion in cash and short-term investments. That is a roughly $70 billion increase in under two years.

The borrowing growth has already triggered legal action. Bondholders sued in January, alleging Oracle understated how much more it would need to borrow when it sold $18 billion of bonds in September 2025.

A lease structure would let Oracle add chips without issuing additional bonds — the central appeal of the arrangement under discussion.

How bad is the cash flow gap?

Capital expenditure reached $28.5 billion in the quarter ended August 31, up from $8.5 billion a year earlier — a 235% increase year over year.

The trailing four-quarter picture:

• Capex of $75.7 billion over the last four quarters
• Free cash flow of negative $28.7 billion over the same period
• Operating cash flow of roughly $23 billion last quarter

Operating cash flow is rising, but it cannot cover the AI data center buildout on its own. The funding gap forces Oracle to look beyond traditional bond issuance.

Does the leverage ratio tell a different story?

Oracle's leverage has actually improved on one key measure. Total debt to EBITDA fell to 3.78x in August, down from a peak of 4.70x in February.

But the lower ratio does not eliminate the funding gap. This is not a rescue operation by creditors. Leasing could reduce Oracle's need for upfront borrowing, yet its effect on debt to EBITDA would depend on the lease classification and on how the ratio treats lease obligations.

Who else is chasing AI chip financing?

The same WSJ report described three separate financing approaches among major technology players:

• SpaceX (SPCX) seeking direct borrowing
• Broadcom (AVGO) arranging financing for OpenAI
• Oracle exploring chip leasing through a separate vehicle

Renting could make sense for a company carrying $169 billion of debt with negative free cash flow. It spreads payments over time. But it does not necessarily keep the obligations off Oracle's balance sheet — the accounting treatment remains a decisive detail.

What should investors watch?

The details that matter are the deal's size and whether the lease terms align with the reported $300 billion OpenAI contract, described as lasting roughly five years starting in 2027.

Two open questions will determine the financial impact:

• Whether the lease qualifies for treatment that keeps it outside headline debt metrics
• Whether the payment schedule matches the revenue cadence of the OpenAI agreement

Oracle has not commented on a target amount, and talks with additional partners may produce a different final structure. The company continues to negotiate on multiple fronts while its quarterly capex runs at more than three times the prior year's level.