Oracle was founded all the way back in 1977 as an enterprise software company. Since then, it has transformed into a cloud services giant. These days, it is trying to become one of the most important players in AI data centers. Now, Oracle itself is warning investors that this next act comes with some huge risks. The tech giant filed its annual report late in June, and it includes a long list of ways its massive AI infrastructure bet could fail to pay off. These risks include data centers taking longer to build than expected, supply chain problems, and potential increases in energy costs. Additionally, it said regulations around data security and the environment could also slow down the AI boom. Still, Oracle is willing to take on those risks. “To grow our OCI business, which requires increased computing capacity, we must incur significant capital and operating expenditures,” Oracle wrote in the filing.
The company’s spending on power-hungry data centers needed to train and run advanced AI models has been soaring in recent years. It has major deals with companies like OpenAI and Meta, and it is racing to build enough capacity to keep up with anticipated demand.
In fiscal year 2026, which ended in May, Oracle’s capital expenditures rose to $55.7 billion, up from $21.2 billion the previous year. The company is already eyeing even more spending in fiscal 2027, with plans for $90 billion to $95 billion in capital expenditures. In the long run, Oracle has committed itself to spending hundreds of billions of dollars. Last year, Oracle founder Larry Ellison joined OpenAI CEO Sam Altman and SoftBank CEO Masayoshi Son at the White House to announce Stargate, a massive AI infrastructure project that could invest up to $500 billion in data centers over the coming years.
