Oracle cost-cutting points to AI infrastructure gamble | Computer Weekly

"Oracle posted cloud infrastructure revenue of $4.9bn, up 84% from last year, while its cloud applications business reported revenue of $4bn, a 13% increase. The company is committed to spending $533bn on AI infrastructure to meet what it calls its remaining performance obligation (RPO), which is effectively the volume of compute capacity it will require to fulfil customer contracts."

"Last month, the company announced that to meet the contracted demand from its largest Oracle Cloud Infrastructure customers, including AMD, Meta, Nvidia, OpenAI, TikTok, and xAI, it expects to raise $45-50bn of gross cash proceeds during the 2026 calendar year. It plans to achieve this using a combination of debt and equity financing."

"The use of AI coding tools inside Oracle is enabling smaller engineering teams to deliver more complete solutions to our customers more quickly. We are building brand-new SaaS products using AI, and also embedding AI agents right into our existing applications."

Oracle's Q3 FY26 earnings reveal significant investor concerns about massive AI infrastructure spending and return on investment. Cloud infrastructure revenue reached $4.9bn, up 84% year-over-year, while cloud applications grew 13% to $4bn. The company commits $533bn to AI infrastructure to fulfill remaining performance obligations from major customers including Meta, Nvidia, OpenAI, and xAI. Oracle plans to raise $45-50bn in gross cash proceeds during 2026 through debt and equity financing. Simultaneously, the company is implementing workforce reductions, leveraging AI coding tools to restructure engineering teams into smaller, more efficient groups that deliver solutions faster with fewer employees.

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