For a company nearing its 50th birthday, Oracle Corp (NYSE:ORCL) is acting more like a cash-burning startup than a tech elder statesman. Once the software king of the '80s and '90s, Oracle stumbled through the cloud transition but is now betting big on AI infrastructure.
That bet is proving costly: the company is spending at a rate few peers would dare, torching billions to build a future in which it can stand alongside Amazon.com Inc (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT), and Alphabet Inc‘s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google in the AI arms race.
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Billions Go Up In Smoke
In the May quarter, Oracle posted a $2.9 billion cash burn, driven by $9.1 billion in capital expenditures – triple its spending a year earlier. For fiscal 2025, the company reported a modest $400 million annual cash drain, but that figure could surge.
Oracle has already signaled capex will jump another 19% to at least $25 billion in fiscal 2026. Unlike cash-rich rivals who fund AI ambitions from profitable businesses, Oracle is pulling financial levers to keep pace.
Read Also: Layoffs For AI: Oracle Pulls A Meta—Will Investors Buy The Efficiency Story?
Cost Cuts To Fund Growth
Reports suggest Oracle is cutting bonuses, halting cash raises, and leaning on stock grants to offset pay reductions. Layoffs have also rippled through its workforce as the company tightens its belt to fund massive data center construction.
CEO Safra Catz is betting these painful moves will fuel revenue growth, projecting a 16% jump in fiscal 2026 — just ahead of Oracle's 50th anniversary in 2027.
One Big Bet On OpenAI
While rivals spread their bets across a diverse customer base, Oracle is building much of its new infrastructure to serve a single high-profile client – OpenAI. That makes its AI gamble riskier: any cooling of AI investment could hit Oracle harder than its larger competitors.
For now, Oracle's stock-for-cash trade-offs and aggressive spending signal a company willing to reinvent itself at all costs—literally.
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