Company raises its capital expenditure forecast as it doubles down on AI infrastructure bet.
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Oracle shares slide on $15B increase in data center spending
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99.9 BILLION in long-term debt. To my non-expert ears this sounds like... a lot?
When that bubble pops, it might even sound completely unsustainable and business-ending to me...
When that bubble pops, it might even sound completely unsustainable and business-ending to me...
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Oracle is definitely the most overleveraged large player in this business. Even with the SPVs being set up it's going to be ugly when things go south, but they might have as long as 2-3 years before that happens.
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Is sprinkling "AI" into your earnings reports now no longer enough to goose the stock price? Guess they need to find a new line.
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So AI bubble bursting might take down Oracle? Some good news. Let's hope MS, Amazon, and Google join that club. World could use less abusive corporate overlords.
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I'd be content with Meta and the former Twitter. Though I'd take your three as a stretch goal
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I assume this is something they shove down the throats of customers unfortunate enough to be invested in a software package Oracle bought. Oracle Retail, Oracle Health, Oracle Banking, etc, etc. I've heard plenty of IT folks complain about dealing with Oracle and looking for ways out being on their platforms.
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How much of their new and future revenue is the circular revenue we are seeing with nVidia and OpenAI?
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When the bubble does pop, I hope Ars covers the billionaire to rags story of Larry Ellison.
(crosses fingers and looks above in prayer)
(crosses fingers and looks above in prayer)
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OCI is the absolute worst of the hyperscalers, by a wide margin. Everything is difficult with them and we constantly detect issues long before they do or even admit to them. I’m not certain anyone at OCI understands how computers work. Its like the offshored employees running the place are working off docs given to the last batch of offshored hands who were given documentation by employees laid off 20 years ago.
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Ellison is like a dull version of Elon. He shares his bizarre political leanings, his character flaws, but he lacks the vision and showmanship.
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Really the only interesting thing about all this is where all this money suddenly appeared from to build data centers. Companies, and their directors, refuse to pay their fair share but suddenly there's basically a trillion dollars the last 3 years to be sunk in AI and their data centers. All this capital was just sitting on their balance sheets? No, it was being used for stock buybacks and dividends for the next yacht. I don't feel bad for Oracle or any other company. Just means these billionaires will have to get a new yacht every 6 years instead of 5.
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Can't wait for the inevitable "too big to fail" cries and sobs from the poor top hats and also the inevitable tax-payer bail outs (i.e. socialized costs).
The bubble will pop - but it will be us lowly peasants holding the bag, not the ones that caused it or profited the most from it.
The bubble will pop - but it will be us lowly peasants holding the bag, not the ones that caused it or profited the most from it.
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MilanKraft
Ars Tribunus Angusticlavius
It's probably still enough for many, just not Ellison, who has bungled things so badly it's impossible to not notice.
As a sidebar on the continuing effect of throwing the term "AI" around, even the now-unquestioning "journalists" at Time have named those who created "thinking machines" (don't make an LoL big enough) with the Persons of the Year award. WTF?? Despicable that once trusted publications are now complicit in the lie. Nobody questions anything. Just hop aboard the hype train and enjoy the ride, I guess. Reckless morons. Even Ars has skirted that cliff occasionally, though obviously not to the same degree as traditional media.
Can't wait to revisit when the crash hits; we should all pick an editor or two from our favored publications and send a "next time do your fucking jobs" email.
https://apnews.com/article/time-person-of-year-2025-77ec65c6792bc99ec2ce1919c5f421ea
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Oracle dies? yay!
This bubble will have fewer victims than most expect as the biggest players can afford it as the article mentions (you can add Apple and Meta to the list) but Oracle for how big it is has yearly revenue lower than Meta has yearly Net profit.
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The Ellison family is on very friendly terms with Trump. When the bubble bursts, they'll find a way to socialize the losses.
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The biggest spenders Amazon, Alphabet, Microsoft etc can afford it and are spending what they can afford.
Not many companies are trying to keep up with the Joneses like Oracle is.
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The guy would still be a billionaire even if he lost all the value of his current Oracle holdings. He has sold shares and invested them in other companies, real estate etc.
It's only younger private companies where the billionaire owner can lose everything.
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It's pretty clear that Oracle is the leading candidate establishment company likely to collapse with the impending AI crash.
I wonder what other companies may be in danger from the fallout. Server manufacturers? Any other chip makers beyond Nvidia who might be particularly dependent upon sales of AI hardware (e.g. peripheral chips specific to servers)?
I wonder what other companies may be in danger from the fallout. Server manufacturers? Any other chip makers beyond Nvidia who might be particularly dependent upon sales of AI hardware (e.g. peripheral chips specific to servers)?
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Yet another consequence of financialization. Instead of being dependent on national or company funds (which at least theoretically force leaders to think about the long-term viability and stability of their organizations), all of our retirements are now tied to the stock market, which means that we're all de facto enslaved to "line goes up".
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If it mostly takes Oracle down with it, the tech world will probably be a better place for it.
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Revenue? Maybe. Margin? Not in the direction implied here. Oracle is heavily investing in a commodity business likely sooner than later to hear the starting gun for a race to the bottom as some--ANY--return on the enormous outlays is demanded.
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They didn't and don't have this capital. This is all financed through debt. That's the risk of the bubble popping--the bag is being held by others.
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Oracle is still up for the year when you zoom out. Reporting losses from the tippy top exaggerates the issue.
I'm sure Ellingson is crying all the way to the bank that he is suffering from paper "losses".
I'm sure Ellingson is crying all the way to the bank that he is suffering from paper "losses".
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You did see my prayer part didn't you?
That part covers the domino effect / butterfly effect needed that gets Larry's stupid puffed up face in
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The supermarket worker is circulating cash. The current tech scheme is circulating debt obligations. It's three card monte for a trillion dollars, and the best bet of all is that there is no peanut under any of the cups.
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Look for these keywords in earnings reports:
AI Powered Blockchain.
Diamon Hands.
Hoddlegang
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Hey folks they are doing just fine… Oracle has a deep backlog of AI projects from other companies and those other companies have a deep backlog of projects from other companies and those companies have a deep backlog of projects with Oracle.
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I see where you come from, however, being an actual Oracle customer using their database stuff, I'm actually pretty concerned about their level of spending on AI (especially those fast aging data centers), so that the AI bubble bursting presents a real chance to take them down, also making Oracle DB an unsustainable business ...
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Instructables can be Confusable
Wise, Aged Ars Veteran
I agree in principle with the last paragraph. Though I feel as though we often forget that we for all intents and purposes no longer have real, actual journalism left in this country and that those editors were in fact actually doing their jobs- being the propaganda outlets for the oligarchs.
Their mission is to perpetuate the cultural warfare that has moved from “Greed is good”, and metastasized into “Greed is God” and we are all going to either worship at this alter; or be sacrificed upon it.
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Apple isn’t super exposed and Google is well positioned to be limited in impact.
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I know that transitioning off of Oracle seems daunting, but the other side of that work is glorious. If for no other reason than you don't have to deal with Oracle ever again.
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ColdWetDog
Ars Legatus Legionis
I imagine all those folks who signed onto Cerner* (recently acquired by Oracle) are also nervously scanning the headlines. Either the thing implodes and Cerner gets spun off again or AI infiltrates the product - which, while not being a great product, isn't an awful one. What fun.
* Number 2 Electronic Health Record behind EPIC in the US.
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