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Comment by dofm | Hacker News Reader

Oracle is a really serious problem, because they actually are too big to fail. Nobody can take Oracle's core business that quickly. So multiple governments, internationally, are going to have to step in to preserve the various outposts of Oracle that keep them and major organisations running.

Those bits could be sold off to different global consulting firms, I suspect.

(But aren't those global consulting firms also going to be freaked out about their own AI risks? And what does the whole AI-assisted coding thing do to a sober assessment of what all of Oracle's global business is worth? Lots of unanswered questions)

Also that is not the AI data centre bits; those will have to be chopped off and dumped.

If that doesn't seriously spook the markets — a company as well-known and formerly blue-chip as Oracle, needing an international bailout — then it would be kind of surprising.

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I think liquidation would be unlikely. Restructuring would be more likely. Like as happens with airlines from time to time.

Everyone is salivating at the prospect of One Rich A-hole Called Larry Ellison getting his come-uppance, but this is the correct take. Oracle without cloud is still a profitable (if much smaller) business that can continue on for quite a while. Larry (along with everyone else holding $ORCL) gets hosed, but corporations will still continue to get extortion requests couched as "opportunities to license Java 8"

I don't see a world where Larry gets financially hosed. The whole system is setup to protect him, there will be a parachute.

He will believe he has been hosed because the parachute will be for less than he believes is his proper share.

He's 82.

Even for a megalomaniac, at some point it doesn't really matter.

These people never seem to realize that time with the grandkids really is priceless.

Yeah, like what happened in the 2008 financial crisis where governments had to step in to save the banks as people defaulted on housing payments due to high mortgages.

Oracle is already close to being classified as junk and reaching a tipping point. If/when that happens it is unclear what affect that will have on the markets on companies invested in AI datacenters with Oracle, and other companies that Larry Ellison and other Oracle investors own shares in.

Yes — I think the thrust of it is that Oracle is unusual because all of their risk is on their books, right? They aren't using SPVs. So it's much clearer.

So the worry is that it makes it clear that the unexamined risk in the SPVs has a lot less light shed on it.

(ETA: that article suggests Oracle is using SPVs)

Oracle’s customers/counterparties aren’t really at risk of becoming unsecured creditors in a bankruptcy situation though, so there’s no contagion risk, so “too big to fail” does not mean what it means when you’re talking about a systemically important financial institution.

Is oracle too big to fail?

I mean yes, there are key contractors for certian things, but depending on the structure they can be chapter 11'd to yeet that debt.

Of course junking all those bonds would cause a crisis.

Their software is embedded into so many governments and Fortune 500s. It also makes them unlikely to go completely bankrupt but just Chapter 11, reorganize and sell off those parts.

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