Oracle is entering a new growth era, and the driving force behind its accelerating sales is artificial intelligence. From exploding cloud demand to unprecedented backlog conversion, AI is now central to Oracle’s technology stack, customer wins, and financial trajectory.
Oracle said its Remaining Performance Obligations rose 438 percent to $523 billion in fiscal 2026 Q2. Oracle says its quarterly revenues grew 14 percent to $16.1 billion. Cloud revenues increased 34 percent to $8 billion. Software revenues fell 3 percent to $5.9 billion.
Much of this surge is directly linked to new AI infrastructure contracts from customers such as Meta, NVIDIA, Uber, TIM Brasil, and other global enterprises.
Oracle Chairman Lawrence Ellison said the company’s AI-driven platform is transforming how customers use their enterprise data. He noted that Oracle’s new AI database and AI data platform allow modern AI models to perform multistep reasoning on enterprise data while maintaining privacy and security. Ellison said this unified platform breaks down data silos and lets businesses use AI to generate real-time insights across all their operations.
The demand for AI infrastructure is reshaping Oracle Cloud Infrastructure (OCI). Oracle delivered almost 400 megawatts of new capacity and 50 percent more GPUs compared to the previous quarter. GPU-related cloud revenue rose 177 percent while cloud infrastructure revenue grew 66 percent. OCI now operates 147 live customer-facing regions with 64 more in development. CEO Clay McGork said customers typically consume allocated capacity within two or three days, underscoring the pace of AI-driven workloads.
lay McGork explained that Oracle’s AI capacity expansion is highly capital intensive, but the company can limit upfront spending through flexible deployment models. These include customers bringing their own AI chips and vendors renting capacity instead of selling hardware, which significantly reduces Oracle’s funding needs. While some analysts estimate Oracle may require up to USD 100 billion to support its AI build-out, the company expects to raise far less while maintaining its investment-grade rating.
Oracle said AI infrastructure margins will eventually reach the 30 to 40 percent range, with the timeline depending on how quickly new data centers come online. Since Oracle only incurs expenses once facilities are operational, the low-revenue ramp-up period is limited to a few months. Faster delivery of AI capacity is the biggest driver of margin expansion. The company also emphasized that OCI infrastructure is fully fungible: unused GPU capacity can be reassigned between customers within hours, and AI customers typically consume new capacity in two to three days.
Larry Ellison outlined Oracle’s strategy to expand AI services beyond infrastructure by enabling AI-driven use of enterprise data. Oracle is making its database available across all major clouds, converting it into a vector database, and building an AI data platform that unifies and vectorizes all enterprise data—regardless of where it resides. This allows AI models to perform multi-step reasoning across an organization’s entire data estate, dramatically increasing the value of Oracle’s platform.
Executives also highlighted momentum in AI-powered applications. Oracle says it is the only provider delivering complete suites across back-office, front-office, and industry verticals, with more than four hundred AI features embedded in Fusion apps. AI agents in healthcare, for example, can be deployed in weeks without heavy implementation work. Growth across ERP, SCM, HCM, CX, and industry apps is accelerating, supported by rising deferred revenue. Oracle expects AI-infused applications, unified data platforms, and its multi-cloud strategy to drive sustained expansion in its applications business.
Multi-cloud demand is also surging. Oracle reported an 817 percent increase in multi-cloud database consumption. Customers can now use multi-cloud universal credits to deploy Oracle databases across AWS, Azure, and Google Cloud with consistent pricing. Oracle launched 11 new multi-cloud regions this quarter, bringing the total to 45.
On the applications side, AI is accelerating sales cycles and driving large multi-pillar deals across industries. Oracle Cloud Applications revenue reached $3.9 billion, growing 11 percent, with strategic back-office applications up 16 percent. New AI-enabled use cases are boosting enterprise adoption. In telecom, TIM Brasil is using AI agents built on OCI to enhance customer experience, achieving faster issue resolution, higher customer satisfaction, and fewer network-related interventions.
Oracle also recorded 330 cloud application go-lives during the quarter. Virgin Atlantic Airways, DocuSign, Broadridge, and Saudi Telecom were among the large enterprises going live on Oracle’s cloud suite. Cloud application deferred revenue rose 14 percent, a leading indicator of stronger future sales.
The company expects AI-driven demand to contribute an additional $4 billion in fiscal 2027 revenue. Oracle forecasts cloud revenue growth of 40 to 44 percent for the third quarter, with total revenue expected to increase 19 to 21 percent.
With AI integrated across its database, applications, and cloud infrastructure platforms, Oracle is positioning itself as the enterprise engine for next-generation AI workloads. Leadership expects accelerating momentum as global organizations prioritize AI adoption using unified data platforms and multi-cloud architectures.
Rajani Baburajan
