‘Today, we are faced with a once-in-a-generation moment where AI changes everything,’ Oracle co-CEO Mike Sicilia says.
Greater hardware flexibility, deepening multicloud partnerships, allowing enterprises to securely leverage private data for artificial intelligence and leaning into AI agents are some of the ways Oracle, its revamped leadership team and partners are taking on the AI era.
The Austin, Texas-based cloud and database products vendor will pursue this strategy as it chases a lofty goal of $225 billion in consolidated fiscal year 2030 revenues, as disclosed at the vendor’s AI World conference that recently wrapped in Las Vegas. Reaching that goal would mean a 31 percent compound annual growth rate (CAGR).
“Today, we are faced with a once-in-a-generation moment where AI changes everything,” one of the nearly 50-year-old company’s two new co-CEOs, Mike Sicilia, said in his AI World keynote address. “All of our collective innovations along the way serve as the foundation for our AI platform going forward.”
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Oracle Eyes $225 Billion
The vendor also said it crossed a remaining performance obligation (RPO) of $500 billion, as promised to analysts on the vendor’s September earnings call. Oracle added about $65 billion in total contract value (TCV) in about 30 days for OCI, Morgan Stanley said in a report Friday.
Scott Whitley, chief revenue officer of Troy, Mich.-based Oracle solution provider Centroid Systems, told CRN in a recent interview that business is booming with the database giant. The vendor’s massive backlog of AI business has served as a tailoring for the solution provider.
“I’ve been working with Oracle for the past decade. And I have just never seen something like this,” Whitely said. “I know that’s the craze of GPUs (graphics processing units), but even older versions are just getting gobbled up. It’s a really fun time to be around it. It’s challenging because it changes every day. But I think that’s everybody’s company right now.”
The vendor’s reveal in September that it had $455 billion in backlog came with criticism that the money comes from contracts secured with OpenAI, Facebook parent Meta and Elon Musk’s xAI. The incremental $65 billion TCV comes from seven deals across four customers. Some of that is from Meta. OpenAI contributed no incremental value, which could better assure analysts around Oracle’s backlog stability, according to Morgan Stanley.
But Oracle co-founder and Chief Technology Officer Larry Ellison dismissed concerns around an AI bubble proving detrimental to the technology in the long run, recalling the early 2000s dot-com crash when naysayers didn’t separate the work companies like PayPal did with the work a Pets.com did.
“If I can sell pet food in an e-commerce site, that suddenly means I’m an internet company–not really,” he said. “So yes, there’ll be people spending money on AI because almost every tech company these days calls themselves an AI company. But they’re not. A lot of them are not. But AI in terms of its value, this is the highest value technology we have ever seen by far.”
Ellison called AI training “the largest, fastest growing business in human history–bigger than the railroads, bigger than the Industrial Revolution.”
“It is a whole new world that is dawning,” he said.
Here’s more on how Oracle sees its place in the agentic AI future and what the channel can take away from the trends the company’s executives see in the infrastructure, applications and database markets.
AI, Cloud Infrastructure
Along with the $225 billion consolidated revenue goal Oracle revealed at its conference, the vendor increased its expected Oracle Cloud Infrastructure (OCI) revenues going into the 2030 fiscal year–although its $18 billion for the 2026 fiscal year revenue is unchanged.
The $32 billion for 2027 is now $34 billion. The $73 billion for 2028 is now $77 billion. The $114 billion for 2029 is now $129 billion. And the $144 billion for 2030 is now $166 billion. The new numbers reflect a 75 percent CAGR. OCI is on its way to around three-fourths of Oracle revenue compared to 50 percent today, Bank of America said in a report Friday.
One of its new co-CEOs, infrastructure-focused Clay Magouyrk, said in his AI World keynote that Oracle’s focus on hardware flexibility as now paying off in the AI era when OCI is optimized for a variety of hardware accelerators, investment in disintermediation to drive down network fees for customers, work with Microsoft and Google to charge zero egress fees for multicloud customers and other differentiators.
“We’re constantly focused on living up to our commitment to be the highest performance, lowest cost and most secure infrastructure possible,” he said. “And we get closer to that ideal every single day.”
Oracle’s Abilene, Texas, data center project under development will eventually consume 1.2 billion watts, enough to power 1 million four-bedroom homes in the U.S., and have a cluster with more than 450,000 Nvidia graphics processing units (GPUs) when fully provisioned, Ellison said.
“That’s a long way from writing code in my bedroom in college,” he quipped from the stage.
Oracle will make its Zettascale10 AI supercomputer cluster underpinning the Stargate supercluster Oracle is working on with OpenAI available in the second half of the 2026 calendar year. It will scale to 800,000 Nvidia graphics processing units (GPUs) and use Oracle’s Acceleron networking architecture.
Acceleron should help improve users’ infrastructure experiences through host accelerators, fabric architectures and fabric accelerators, according to KeyBanc’s report Wednesday.
Oracle has also shed some more light on growth and economics of non-AI infrastructure-as-a-service (IaaS) OCI components. Oracle saw 77 percent growth year on year in annual contract revenue (ACR) in the first quarter of fiscal year 2026 in distributed cloud, according to Morgan Stanley’s report Friday.
This business sees $67 million in average deal sizes and gross margins of up to 60 percent, according to the firm.
Oracle saw more than 40 percent growth year on year in the first quarter among cloud native customers, with $97 million average deal size and gross margins of up to 60 percent. In enterprise, Oracle saw 33 percent growth year on year.
The vendor’s AI IaaS now has about 700 customers on the platform, with revenue more than double year on year, according to Morgan Stanley’s report. Oracle did not share details on the customer mix, duration and whether the contracts are for AI training, inference or other purposes. It expects gross margins of up to 40 percent.
Oracle has also further broken down the economics for big data center deals, estimating that land, data center and power represent about 35 percent of cost outlay and compute, networking and storage represent the rest, using a 1 gigawatt (GW) $60 billion total contract value (TCV) deal as an example.
The vendor expects about $39 billion of costs for a GW of data center capacity, with $10 billion in revenue for six years, but it did not provide its capital expenditure (CapEx) outlook in the years ahead, according to Morgan Stanley. Part of the reason for not sharing a forecast was how fast and how much the company sees changes in the mix and type of GPUs, the amount of storage and general purpose compute and other underlying variables for cost.
The capital expenditures for 1 GW of AI infrastructure capacity should be around $25 billion, according to a William Blair report Friday. That GW should generate $10 billion in consumption revenue a year, reaching $100 billion by fiscal year 2030. Oracle might need 10 GW of capacity to meet its revenue target, costing about $250 billion in CapEx. Oracle would get a $49 billion free cash shortfall that debt could finance to the tune of $2.9 billion in additional interest expenses a year with a 6 percent rate.
William Blair expects operating margins to fall to 33 percent in fiscal year 2028 and stay steady into the following FY, potentially starting to improve in 2030.
AI Apps Powered By Private Data
Oracle’s other co-CEO, Mike Sicilia, who leads the applications side of the business, said that Oracle is helping customers unlock AI use cases with the structured and unstructured data they’ve long stored in the vendor’s database products.
He said customers are using AI to decrease hiring time, resolve service tickets, more accurately predict cash flow, flag supply chain risks and more. Employees gain more time for more strategic and creative work with once-manual tasks now automated. “You’re getting real results with no extra cost and no waiting,” he said.
Oracle, Magouyrk said, is allowing customers to use secure controlled access to bring AI models to private data without exposing it to the internet to attain the self-describing attributes of public data. Users can also create a shared index of private data and leave it in its system of origin while controlling user access.
He pointed to Oracle’s GenAI agent platform as a way to integrate tools into AI workflows for retrieval augmented generation (RAG), coding and other agentic tasks.
The vendor expects AI database and AI Data Platform revenue to scale from about $2.4 billion in fiscal year 2025 to about $20 billion by fiscal year 2030 with a 53 percent five-year compound annual growth rate. Multicloud scaling is a driving factor, according to Morgan Stanley.
The AI Data Platform, which became generally available last week, brings users automated data ingestion, semantic enrichment and vector indexing with a unified view and governance across all data and AI assets.
Global system integrators and consultancies have committed more than $1.5 billion in collective investment in the AI Data Platform, including training more than 8,000 practitioners and developing more than 100 industry-specific use cases, according to Oracle. Among those early GSI partners are Accenture, Cognizant, KPMG and PwC.
Leaning Into Agents
AI agents will also further differentiate Oracle from the pack, with the vendor now offering more than 400 AI agents in its Fusions application suite and more than 200 in vertical products even though its initial target was 100 agents. More than 2,400 customers use AI in the industry apps, according to Morgan Stanley’s Friday report.
Agentic use cases range from reducing documentation time per patient at clinics, avoiding calls with humans at support centers and reducing financial crime investigations and upselling customers.
In more product news at the application and database layer, the vendor said its new Oracle AI Database 26ai has an autonomous AI data lakehouse and AI capabilities for vector search, database management, data development, app development and analytics. 26ai replaces 23ai and is applicable through the October 2025 release update.
Oracle has expanded its AI Agent Studio for Fusion Applications platform for building, testing and deploying agents. Part of the expansion is a new AI agent marketplace for Oracle-validated, partner-built AI agents inside Fusion apps. The marketplace features agents built by various Oracle system integrator partners, including 2025 CRN Solution Provider 500 membersAccenture, Wipro, Alithya and Infosys.
The AI agents built by system integrators range from one that processes sales orders and automatically adds shipment addresses based on sales and accounts receivables data, one that helps human resources (HR) managers access and update employee data by retrieving data from contracts and one that optimizes negotiations through access to historical purchase order data.
The studio gained support for Model Context Protocol (MCP), cards for the Agent2Agent communication standard and controls for allowing agent access to external services without exposing sensitive data through key and authentication token management. The studio has more than 32,000 certified experts trained on its capabilities, according to the vendor.
Partners have been positive on Oracle’s position in database and applications thanks to its full-stack approach, high performance hardware capability for high-transaction workloads and AI Database’s potential to pull more customers into the cloud, according to Morgan Stanley’s Friday report.
Partners have also seen AI opportunities in human capital management and enterprise performance management. Enterprise resource planning AI products have been seeing a more gradual ramp, on the other hand, according to Morgan Stanley’s Friday report.
Oracle’s recent agentic AI expansion of its ERP and EPM products include payables agents that ingest invoices from emails, portals and documents and apply tax and fraud checks before routing the invoices for approval and payment. A team sync advisor agent submits weekly updates on employee performance progress, challenges and requests. And a quote-to-purchase requisition agent captures suppliers quotes from emails and puts the information in the generated order.
Agents added to Oracle Fusion Cloud HCM aim to help recruiters analyze internal and external candidates’ backgrounds, skills and interests to surface better job matches and improve insights, according to the vendor.
Partners also favorably compared Oracle Fusion with SAP’s offers, which could serve Oracle well as back-office software’s AI functionality becomes a key decision point for enterprise chief information officers beyond the various merits of company clouds, KeyBanc said in a report Friday. Implementation partners also told the firm that customers are excited for agentic AI but still learning how to use it. These partners have focused on back-office finance and a few other key use cases so far.
Industry, Multicloud Approach
Although Oracle has been deepening its partnerships with the hyperscalers of Microsoft, Amazon Web Services and Google, Ellison took time in his AI World keynote address to point out that Oracle is more involved in health care applications than its cloud competitors and that Oracle is building scaled applications to automate entire industries, pointing to Oracle’s work in health care payment systems as an example.
He said that while Oracle and Google are developing AI technology, Microsoft and AWS “may or may not” in a possible reference to Microsoft’s close ties to ChatGPT maker OpenAI and AWS’ deep ties to Claude maker Anthropic.
“Our goals are different than those other clouds,” he said. “We’re a participant in creating AI technology. And we’re also a participant in using that technology to solve problems in different ecosystems.”
Still, Oracle’s increased fortunes from a more hyperscaler friendly approach can’t be understated. It saw multicloud consumption revenue grow 16 times year on year. Microsoft Azure drove that multicloud revenue, not a surprise given the longer partnership between both tech titans compared to the newer Google Cloud and AWS partnership, according to Morgan Stanley. Gross margins in the enterprise category can go as high as 80 percent.
Solution providers who talked to the investment firm said that they see more customers jumping on multicloud strategies in the quarters ahead.
The release of industry product enhancements continued even after AI World’s end, with Oracle revealing on Monday that it has enhanced its Oracle Public Safety Suite unified hardware and software platform for law enforcement and first responders with officer-worn cameras and AI-enabled mobile voice controls and insights that aim to improve situational awareness and decision-making, among other advancements.
Examples of Oracle going deeper into its partnerships with the hyperscalers include Oracle and Microsoft collaborating on an integration blueprint for organizations to use Oracle Fusion Cloud Supply Chain & Manufacturing (SCM) to improve data-driven decision making and automate processes based on live insights from factory equipment and sensors delivered by Azure IoT Operations and Microsoft Fabric.
Oracle also opened a new reseller partner program for solution providers to provide Oracle Database@AWS, Database@Google Cloud and Database@Azure, with participating solution providers including Deloitte, Accenture and Infosys.
AI Economics: Upselling, Simplified Payment Model
AI represents an upsell opportunity for Oracle and its partners–customers expanding from one Fusion app to an entire suite can increase their spend by 150 times. About 55 percent of its customer base is in one pillar of the portfolio. Only 2 percent are in an entire suite.
Oracle’s focus on growing its AI training business will position the vendor for upselling inferencing and platform-as-a-service (PaaS) centered around central processing units (CPUs) and GPUs, according to Bernstein–although training is a lower-margin business for the near term. Bernstein called concerns around Oracle’s AI business and profitability “overblown.”
As for simplifying payment for AI wares, Oracle’s new multicloud universal credits licensing model allows for Oracle AI Database and OCI services under one contract across AWS, Microsoft Azure and Google Cloud, opening up more opportunities for partners.
Should Oracle make good on the forecast, the company will become the third largest hyperscaler by or before fiscal year 2030, according to a report by Bernstein on Friday. The investment firm contrasted Oracle’s strategy of not explicitly charging customers for AI consumption in the software-as-a-service products–instead taking the same credit-based approach as other SaaS vendors–with Oracle rival Salesforce’s variety of business models also showcased last week during its Dreamforce 2025 conference.
A variety of investment firms pointed out that despite Oracle’s revised revenue targets, the vendor still didn’t provide discrete gross margin and operating margin targets and the capacity investment needed to meet targets.
The vendor appears to face significantly constrained capacity and needs to execute well in the near term to give analysts confidence Oracle can meet its targets, Morgan Stanley said in a report Friday.
