Oracle faces potential $7 billion guarantee requirement for Wisconsin AI data centre

Oracle (NYSE:ORCL) could be required to provide more than $7 billion in financial guarantees for its planned Wisconsin data centre after state regulators declined to ease credit requirements intended to shield electricity customers from higher energy costs. According to the Financial Times, the Wisconsin Public Service Commission has decided not to revise the conditions imposed on utility provider We Energies. Under the current framework, Oracle may need to secure a letter of guarantee worth approximately $7 billion, a requirement that could cost the company more than $100 million each year. The planned data centre in Port Washington, Wisconsin, is expected to deliver nearly one gigawatt of computing capacity and forms part of Oracle's $300 billion computing infrastructure agreement with OpenAI. Under We Energies' tariff for very large electricity users, developers of major data centres with an S&P credit rating below A-minus must provide collateral. Oracle held a BBB credit rating, two levels below the threshold. Last month, Oracle asked a county court to invalidate the rule. A spokesperson for the Wisconsin regulator confirmed the commission had decided not to move forward with Oracle's petition. Oracle told the Financial Times that it remains optimistic the commission will eventually reconsider its position after evaluating the employment opportunities and economic benefits expected from the $15 billion investment.