However, he pointed out, “theatre is not delivery. What Oracle served was less a coronation than a carefully staged performance: a heady cocktail of ambition, backlog, and speculation. At Greyhound Research, we argue that such moments call not for applause but for scrutiny. The right instinct is not to toast, but to check the bill.”
Oracle ‘betting the farm’ on AI
Rob Tiffany, research director in IDC’s worldwide infrastructure research organization, had a different view, saying, “in an effort to catch up with the other hyperscaler clouds, Oracle has been aggressively building out its Oracle Cloud Infrastructure (OCI) data center regions all over the world prior to their Stargate endeavor with Crusoe, OpenAI, and SoftBank, to capitalize on the AI opportunity.”
Speculation about the burst of the AI bubble aside, he said, “the strength and success of the OCI buildout thus far rests with Oracle’s dominant database and Fusion Cloud ERP, and those enterprise customers should be confident in Oracle’s future.”
Scott Bickley, advisory fellow at Info-Tech Research Group, added, “[while it is] extraordinary to see them take on this kind of debt, [Oracle] are really betting the farm on the AI revolution panning out. There are a lot of risks involved if momentum in the AI space loses its current trajectory. There could be a lot of stranded infrastructure and capital.”
The ultimate risk, he said “lies in the viability of OpenAI. These guys have said they’re going to spend $1.4 trillion on AI capacity build out, and they’re sitting on a revenue base of $13 billion a year right now. If they go up in smoke, then that could leave a lot of this investment stranded. That would be the worst case kind of Black Swan scenario.”
At this point, he said, “CIOs would not want that bubble to burst because that is a key part of their strategy moving forward. Maybe they are not even contemplating at this point that doomsday scenario.”
