Oracle faces $100 million annual bill to honor $7 billion guarantee backing its Wisconsin 1 GW data center campus developed with Vantage and OpenAI.

Oracle faces over $100 million annually in financing costs to guarantee power commitments for a nearly 1 GW datacenter campus under development in Wisconsin with Vantage and OpenAI, according to filings with state regulators.

The Public Service Commission (PSC) of Wisconsin, the state's energy regulator, has declined to revisit an April decision that imposed financial security requirements on the project. The PSC said the safeguards protect existing customers and improve public transparency around datacenter energy needs.

The Lighthouse Campus in Port Washington is supported by local utility We Energies and is projected to require nearly a gigawatt of power. In April, the PSC approved a Very Large Customer (VLC) and Bespoke Resources Tariff for the facility, including modifications to prevent transmission cost-shifting from datacenter customers to existing ratepayers.

In an affidavit supporting a joint petition to reopen the decision, Oracle stated that without modification, it would be required to post security through a cash deposit or letter of credit. "Based on our current projections, we anticipate that, under the current mandated requirements, we will ultimately be required to post financial security, likely in the form of a letter of credit in an amount exceeding $7 billion, at an annual cost that could exceed $100 million," the filing said.

To qualify for an exemption, Oracle must maintain credit ratings of at least A− from S&P and A3 from Moody's. However, S&P downgraded Oracle from BBB to BBB− earlier this month, complicating the application. S&P attributed the risk partly to Oracle's substantial OpenAI exposure. "We estimate that OpenAI makes up roughly half of the $638 billion in Oracle's remaining performance obligations (RPO)," S&P stated. "If OpenAI were unable to pay Oracle, we believe Oracle could be left with massive datacenter leases that it might be unable to exit or have to re-lease to new tenants under less-favorable terms."

Oracle has increased its committed credit line to $10 billion, provided by a syndicate including Bank of America and JPMorgan Chase. In a statement, an Oracle spokesperson said the company "remains committed to paying its full share for energy and providing the financial guarantees needed to ensure there is no risk to Wisconsin ratepayers." The utility's proposal, Oracle argued, provides collateral equal to 100 percent of Oracle's contractual obligations and reflects an industry-leading mix of collateral sources.

The Port Washington facility is expected to create thousands of jobs and drive regional economic growth. Oracle expressed hope that the PSC would reconsider its position, stating the company seeks "a commercially reasonable path to investment in the state of Wisconsin."

Oracle's financial exposure reflects aggressive capex expansion driven by AI infrastructure demand. The company's capex guidance for fiscal 2027 has risen to $90−95 billion from an earlier forecast of $60 billion. Meanwhile, S&P forecasts negative free operating cash flow of $42 billion for the same period, a deterioration from the previous estimate of negative $24 billion. This spending surge follows Oracle's September announcement of $455 billion in remaining performance obligations, of which $300 billion is tied to OpenAI.