Dive Brief:
- Oracle fielded more cloud business than its data centers could handle, executives said Wednesday during the company’s Q4 2025 earnings call for the three months ending May 31. “We actually currently are still waving off customers — or scheduling them out into the future so that we have enough supply to meet demand,” CEO Safra Catz said.
- The junior hyperscaler, which trails cloud giants AWS, Microsoft, Google Cloud and Alibaba Cloud in the global battle for market share, saw quarterly cloud infrastructure and software services revenue increase 27% to $6.7 billion year over year, accounting for 42% of the company’s $15.9 billion in revenue.
- Oracle’s capital expenditure for the entire fiscal year more than doubled to $21.2 billion compared with the prior year as the company raced to add data center capacity. “We are putting out as much capacity as we possibly can,” Catz said. “When we all of a sudden have higher CapEx, it means we are filling out data centers and we are buying components to build our computers.”
Dive Insight:
As large language models devour compute resources, cloud providers are pouring tens of billions of dollars into data centers to narrow gaps between supply and demand.
Hyperscalers drove an unprecedented 34% year-over-year spike in data center hardware and software spending, which hit a record high $282 billion in 2024, according to Synergy Research Group. Large cloud providers accounted for more than half of $455 billion in data center capital investments on the year, marking a 51% increase over 2023, the Dell’Oro Group found.
Oracle remained a relatively small fish in an expansive pond. The provider took in roughly 3% of $94 billion in global cloud infrastructure services spending, which grew 23% year over year during the first three months of 2025, according to Synergy Research Group. AWS and Microsoft, the two largest hyperscalers, captured the lion’s share of cloud revenues, controlling 29% and 22% of the market, respectively.
As the market grew and capacity constraints surfaced even among the largest providers, Oracle doubled down on data centers, expanding its cloud estate to more than 100 regions. In March, the Catz vowed to triple capacity by the middle of next year and the company committed to a $5 billion U.K.-based cloud infrastructure buildout.
On Wednesday, Catz said the company’s capital expenditure will likely surpass $25 billion in the next fiscal year.
“We don’t build unless we’ve got orders for our capacity to be built out,” said Catz. “It is all to meet demand.”
Oracle CTO Larry Ellison added color to Catz’s assessment.
“We recently got an order that said we’ll take all the capacity you have wherever it is — it could be in Europe, it could be in Asia, we’ll just take everything,” Ellison said. “We did the best we could to give them the capacity they needed. The demand is astronomical.”
As the company grows its cloud footprint, it is also leveraging recent partnerships with its three biggest competitors to grow its database business. In the last two years, AWS, Microsoft and Google Cloud made separate agreements to run Oracle database servers in their data centers.
The multicloud integrations are currently deployed in 23 hyperscaler cloud regions, with an additional 47 in the works, Ellison said.
“Most of the world’s most valuable data is stored in an Oracle database,” Ellison added. “All of those databases are moving to the cloud — Oracle’s cloud, Microsoft’s Azure cloud, Amazon’s cloud or Google’s cloud. As use of AI increases, so will Oracle’s database market share.”
