Oracle is spending billions on AI data centers as cash flow turns negative

Oracle is pouring billions into AI‑focused data centers, pushing its cash flow into negative territory even as it reports strong cloud revenue growth that pleases Wall Street. The company faces a major setback after reports that OpenAI has halted expansion of the joint Stargate data center, allegedly due to Nvidia’s newer Vera Rubin architecture outperforming the Blackwell chips Oracle is deploying. With $100 billion committed to hyperscale infrastructure—much of it financed through debt—analysts warn that Oracle may be overextended, especially as rumors of large layoffs circulate. Despite upbeat earnings and claims that AI tools are boosting efficiency, Oracle’s free cash flow has dropped to –$13.18 billion over the past year, raising concerns about the sustainability of its AI strategy.

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