Oracle reaps benefits of infrastructure investments as AI usage spikes

Dive Brief:

• Oracle saw cloud infrastructure and software services revenues increase 24% year over year to $5.9 billion during the three months ending Nov. 30, the company reported Monday in its Q2 2025 earnings statement. Total cloud service revenues are expected to top $25 billion in the fiscal year, CEO Safra Catz said during an earnings call.
• The company is reaping the rewards of cloud-based AI usage spikes. “Record level AI demand drove Oracle Cloud Infrastructure revenue up 52% in Q2,” Catz said, adding that GPU consumption was up 336% in the quarter.
• Oracle’s revenue growth was accompanied by hefty infrastructure investments. The company reported capital expenditures of $4 billion on the quarter and expects capital expenditures for the full fiscal year to double from the previous fiscal year, Catz said. 

Dive Insight:

It was a year of multibillion dollar data center buildouts in the cloud industry. As the three largest providers — AWS, Microsoft and Google Cloud — raced to stay ahead of AI demand, Oracle kept pace. The company expanded the OCI footprint to 98 cloud regions, up from 66 last year, and pledged to spend $10 billion on data center buildouts. 

“We can start a new cloud region with a handful of racks and then scale up with customer demand,” Catz said. The company has many more in the pipeline, she added. 

In addition to growing capacity within OCI data centers, the company forged multicloud alliances to place Oracle services within AWS, Microsoft and Google Cloud environments.

Cloud database service revenue grew 28% year over year and reached an annualized revenue of $2.2 billion.

“As on-premise databases migrate to the cloud on OCI, either directly or through our database-at-cloud services with Azure, Google, and AWS, we expect the cloud database revenues collectively will be the third leg of revenue growth alongside OCI and strategic SaaS,” Catz said.

Oracle’s smaller data centers are akin to a private cloud offering, the company’s Chairman and CTO Larry Ellison said Monday.

“Individual customers are buying complete Oracle regions and installing them … on-premise,” he said. “It is a full Oracle Cloud region [that] just happens to be in a dedicated data center to that customer. We are selling a lot of those as well.”