Oracle’s reliance on OpenAI sparks concerns before earnings report

Oracle’s growing reliance on OpenAI and heavy borrowing for AI infrastructure have sparked investor concerns ahead of its upcoming earnings report.

The US-based enterprise software company has increased its presence in cloud computing through a major partnership with OpenAI, the creator of ChatGPT.

Analysts said a large portion of Oracle’s capital spending is linked to OpenAI-related datacenters, raising questions about single-customer revenue exposure and financial risk.

Oracle, along with other large cloud firms, is expected to spend over US$400 billion on AI infrastructure this year.

The company’s stock has lost all gains from a 36% jump in September, and its credit default swaps have reached record highs as borrowing increased.

Oracle said in October it expects cloud infrastructure revenue to grow to US$166 billion by fiscal 2030 and touted a US$20 billion new deal with Meta Platforms.

According to LSEG, Oracle’s revenue is expected to rise 15.3% to US$16.2 billion in the latest quarter, with net profit up 13.3%.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Oracle’s AI push depends on turning an OpenAI-heavy backlog into recurring revenue

Remaining performance obligations (RPO) jumped 359% year over year to $455 billion in Q1 FY26 1. Deals include a large OpenAI contract, which raises risk if OpenAI slows datacenter buildouts or spend and could dent the projected 77% Oracle Cloud Infrastructure (OCI) growth rate 1.
In Q3 FY25, RPO was $130 billion 2. Cloud agreements span OpenAI and xAI plus Meta, NVIDIA, AMD 2. Analysts question whether AI partners will turn backlog into steady revenue 1.
Multi cloud database revenue from Amazon, Google, Azure rose 115% from Q3 to Q4 FY25 3. Across hyperscalers (the largest cloud platforms), this helps hedge OpenAI exposure and backs up Oracle’s AI infrastructure chops.

Datacenter and power firms can tap OpenAI’s 7 gigawatts (GW) Stargate plan with Oracle

As an OpenAI Stargate partner, it is tied to a 7 gigawatts (GW) build across five sites 4. One site in Shackelford County, Texas represents 1.4 GW with a first building due in 2026, and Bloomberg said that Oracle intends to lease it for AI servers 4.
Project Jupiter in Doña Ana County, New Mexico is a hyperscale campus planned by Stack (a data center developer) plus BorderPlex Digital Assets (a digital infrastructure investment group) with a $165 billion spend, though the target site is not confirmed for OpenAI and Oracle 4. Builders can pursue 47 new multi cloud datacenters within 12 months, plus 30 Oracle Cloud@Customer (Oracle’s on-premises cloud deployment) sites in FY26 3.