Oracle’s Debt-Fueled AI Gamble Pays Off Despite Stock Carnage

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massive debt pile didn’t stop it from delivering a blowout quarter. The enterprise software giant beat third-quarter expectations, with revenue reaching $17.19B versus forecasts of $16.9B. The strong results come as Oracle carries more than $108B in debt and prepares to cut thousands of jobs to help fund Larry Ellison’s ambitious AI push.

• The company’s stock has plunged 54% in six months, though shares jumped 6% after the earnings report.
• Capital spending surged 269% to $8.5B in Q1, with full-year capex projected to hit $90B as Oracle races to build AI data centers.

Betting the farm: Oracle’s three-step pivot involves making its database available in rival clouds, vectorizing data for AI models, and building what Larry Ellison calls an “AI Lakehouse.” The plan has drawn scrutiny amid controversy around the Stargate project with OpenAI and reports of large layoffs, though Oracle denied claims of any potential issues. With $248B in future data center lease obligations still off its balance sheet, Oracle is racing to outbuild rivals in the AI arms race.