American enterprise-software giant, the dominant player in corporate-database management. Its founder, Larry Ellison, briefly became the world's richest man after AI enthusiasm lifted the share price. Its long-time chief executive, Safra Catz, stepped down in September 2025 and was replaced by a duo of successors, Clay Magouyrk and Mike Sicilia. Unlike Salesforce and SAP, Oracle has chosen to build its own cloud infrastructure rather than piggyback on hyperscalers; its quarterly capital budget has exploded from $400m in 2020 to nearly $6bn.
Oracle is one of the biggest energy buyers among big tech. Together with OpenAI and SoftBank, it is developing Stargate, an AI mega-project in Texas. OpenAI struck a $300bn deal with Oracle to build 4.5GW of data-centre capacity over five years starting in 2027—the main contributor to Oracle's blowout earnings projections. Oracle launched a bumper $18bn bond sale in September 2025 to help finance its data-centre construction boom. It also provides software to manage energy demand to utilities globally; it claims that use of its platform has saved $890m for Exelon and its customers.
In 2024 Oracle changed its server depreciation schedule from five to six years. By early 2026 its market value was approaching $1trn. It is counted among the five listed AI powerhouses alongside Microsoft, Alphabet, Amazon, Meta—which between 2024 and 2026 were expected to splurge over $1trn on capital investments, chiefly AI data centres.
Financial transformation
Oracle's pivot to AI infrastructure has transformed its financial profile. In the decade to early 2022 its capital expenditure rarely exceeded 5% of sales, gross margins hovered around 80% and free cashflow stood at a reliable $12bn or so a year. By the quarter ending November 2025, revenue had risen 14% year on year to $16bn—but capital expenditure ate up two-thirds of those sales. Free cashflow turned deeply negative. Net debt grew by $11bn to $88bn. Gross profit fell to around 70% of sales. Return on capital, which reached 13.5% before ChatGPT was released, fell below 10%. Its financial profile now resembles that of a copper miner or utility rather than a software company. OpenAI accounts for over half of Oracle's $500bn in pledged revenue. In July 2025 Moody's and Standard & Poor's put Oracle's debt, which is two notches above junk status, on watch for a possible downgrade. Morgan Stanley estimates total liabilities will nearly treble from just over $100bn to $300bn within three years.
At a data centre in San Jose, Oracle uses stationary fuel cells made by Bloom Energy, a Californian company, which provide power that is cleaner, more flexible and more reliable than that of traditional generators.
Oracle is part of a consortium buying the American operations of TikTok from ByteDance, taking a 15% stake alongside Silver Lake (15%) and MGX, an Emirati sovereign-wealth fund (15%). Oracle already stores TikTok's American users' data under a scheme designed to keep Chinese developers at arm's length. Under the proposed arrangement, ByteDance will lease a copy of its recommendation algorithm to TikTok's new owners, who will retrain it on American users' data under Oracle's supervision. Oracle's founder, Larry Ellison, is friendly with Donald Trump and has overseen changes at CBS News, which his family controls through Paramount.
I never made a mistake in my life. I thought I did once, but I was wrong.