Oracle bets $300 billion on OpenAI data centers, pivoting from database business to AI infrastructure

In September, Oracle announced a $300 billion deal with OpenAI to build data centers, one of the largest cloud deals ever. Oracle has taken out $43 billion in debt to build this neocloud business in fiscal 2026.

Oracle is shifting from its traditional high-margin, low-growth database business to the low-margin, high-growth bare-metal business (renting servers to AI companies). The company's strategy focuses on inference—using AI models to process data outside their training sets—rather than building foundation models.

Oracle's cloud infrastructure revenue was about $4.9 billion in the third quarter of fiscal 2026 (three months ended February 28th), growing rapidly, while its customer support business brought in under $5 billion with zero percent growth. The risk is that OpenAI may be unable to pay Oracle the $300 billion agreed to in their contract if OpenAI cannot raise sufficient funding or become profitable.