Oracle Lease Commitments Surge Nearly 150% Amid AI Infrastructure Expansion

Oracle has news to share that’s making even the most AI-optimistic investors sweat.
The tech giant has revealed lease commitments that nearly tripled in just three months, raising urgent questions about whether this unprecedented infrastructure spending spree signals massive opportunity—or dangerous overreach in an overheated AI market.
According to a CNBC report, Oracle disclosed $248 billion in lease commitments for data centers and cloud infrastructure as of November 30, representing a 148% surge from approximately $100 billion just three months earlier.
These commitments stretch an extraordinary 15 to 19 years, with $10 billion specifically allocated for cloud capacity arrangements. The company simultaneously ramped up its capital expenditure forecast to $50 billion for the current fiscal year—a massive $15 billion increase from its earlier $35 billion projection.
The deal that started it all
Behind Oracle’s spending lies a partnership that could reshape the AI landscape forever. Earlier this year, the company secured a $300 billion, five-year cloud computing contract with OpenAI beginning in 2027, designed to supply roughly 4.5 gigawatts of data center capacity annually—enough computing power to supply millions of homes.
This single agreement represents part of a larger AI infrastructure campaign targeting up to 30 gigawatts of capacity with total investments potentially reaching a trillion dollars. Oracle’s stock initially soared over 40% on news of the OpenAI deal, but reality is now setting in as the company acquires hundreds of thousands of Nvidia GB200 GPUs worth approximately $40 billion to stock these facilities.
The scale becomes even more overwhelming when considering Oracle has already pushed back completion dates for some OpenAI data center projects to 2028 from 2027 due to labor and material shortages.
Cold feet
The market’s enthusiasm quickly turned to anxiety as the true scope of Oracle’s financial commitments became clear. Oracle’s shares plummeted 11% to $198.85 last Thursday (Dec. 11), marking the biggest single-day decline since nearly a year ago, despite strong revenue growth.
The company’s aggressive AI buildout has pushed free cash flow from a modest $2 billion deficit in the August quarter to a $10 billion shortfall by November. Analysts warn this structural financial pressure could translate into higher costs for customers and stricter contract terms.
Adding fuel to investor concerns, Moody’s has expressed worry that Oracle’s debt could surge to four times its earnings due to these AI commitments. The spending spree isn’t just numbers on a balance sheet—it represents $12 billion of capital expenditure on data centers, GPU superclusters, sovereign cloud regions, specialized networking, and high-density cooling infrastructure.
AI industry’s future
Oracle’s massive bet reflects a broader reality that’s reshaping the entire tech landscape: AI infrastructure demands are exploding beyond anyone’s initial projections. The company delivered almost 400 megawatts of data center capacity in the latest quarter while increasing GPU capacity by 50% compared to the previous period.
Remaining performance obligations skyrocketed more than fivefold to $523 billion, driven by new contracts with major players like Meta and Nvidia. This represents contracted work that Oracle must still deliver, creating a massive revenue pipeline—if the company can execute.
Oracle executives are framing the cash flow deficit not as weakness but as strategic investment, with AI workload margins expected to reach 30% to 40% over the life of customer contracts. However, the timeline delays and resource shortages suggest the path from investment to profit won’t be smooth.
Oracle’s unprecedented gamble represents either the smartest bet in AI infrastructure history or a cautionary tale about how quickly boom markets can push companies into dangerous territory.
Read these AI predictions for 2026 and discover the changes reshaping enterprise IT.
The post Oracle Lease Commitments Surge Nearly 150% Amid AI Infrastructure Expansion appeared first on eWEEK.