Oracle Reportedly Delays Multiple OpenAI Data Centers to 2028

• Oracle (ORCL) is reportedly delaying completion of certain OpenAI data centers from 2027 to 2028 due to labor and material shortages, adding pressure on its already strained execution timeline.
• Despite strong Q2 results, including 14% revenue growth and a 68% surge in IaaS, ORCL shares have fallen more than 13% over the past five sessions, with the decline accelerating in the last two days after the company missed Wall Street’s revenue expectations.
• Massive $523 billion RPO and $50 billion capex guidance highlight Oracle’s aggressive AI infrastructure push, yet negative $10 billion free cash flow and rising lease commitments underscore short-term financial risks.

Oracle Corporation (NYSE: ORCL) faces mounting investor scrutiny amid escalating capital expenditures and execution challenges in its aggressive expansion of AI infrastructure, particularly through its landmark partnership with OpenAI. The company’s fiscal 2026 second-quarter results, released earlier this week, revealed total revenues of $16.1 billion, marking a 14% increase year-over-year, while non-GAAP earnings per share reached $2.26. Cloud revenues surged 34% to $8.0 billion, driven by infrastructure-as-a-service growth of 68% to $4.1 billion, underscoring Oracle’s deepening role in powering enterprise AI workloads. However, these figures fell short of revenue expectations, amplifying concerns over the pace at which massive commitments translate into immediate cash flows. Remaining performance obligations ballooned 438% to $523 billion, fueled by new deals with Meta and Nvidia, yet free cash flow deteriorated to negative $10 billion, reflecting intensified investments that have strained short-term liquidity.

Compounding the post-earnings pressure, Bloomberg News reports that Oracle has delayed completion of certain data centers under development for OpenAI from 2027 to 2028, attributing the setbacks primarily to labor and material shortages. These facilities form a critical component of a $300 billion agreement signed earlier this year, aimed at delivering vast computing power for OpenAI’s advanced models, including the forthcoming GPT-5.2. Oracle’s Oracle Cloud Infrastructure (OCI) has positioned the firm as a key enabler in the AI ecosystem, competing directly with hyperscalers like Amazon Web Services and Microsoft Azure by offering specialized GPU clusters optimized for training large language models. The delays highlight broader supply chain vulnerabilities in the sector, where demand for high-end semiconductors from Nvidia and construction expertise outstrips availability, potentially rippling into other hyperscale projects.

The market’s response has been swift and severe, with ORCL shares declining 5.75% to $187.42 following the delay announcement, extending a post-earnings rout that erased approximately $80 billion in market capitalization. This volatility reflects heightened skepticism about the sustainability of AI-driven growth, as Oracle’s capex guidance now projects $50 billion for the full year – up from an initial $35 billion – while lease commitments have escalated nearly 150% to $248 billion, including $10 billion earmarked for cloud capacity. Despite these headwinds, Oracle maintains an investment-grade debt rating and emphasizes diversified demand from sectors like healthcare and finance, where OCI supports compliant, scalable AI deployments. As the company navigates these constraints, its ability to mitigate delays through partnerships, such as with Crusoe Energy for efficient power solutions, will be pivotal. Ultimately, Oracle’s trajectory hinges on converting its unparalleled backlog into profitable scale, reinforcing its evolution from legacy database provider to indispensable AI infrastructure architect in a market projected to exceed $1 trillion in cumulative investments by 2028.

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