- Oracle made two major infrastructure investment announcements this week
- It's planning to spend big on compute upgrades in Germany and The Netherlands over the next five years
- But zooming out, the money is a fraction of its planned capex for fiscal 2026 and beyond
AI is a capex-heavy endeavor. Case in point: Oracle is planning to pour $3 billion into expanding its AI and cloud infrastructure in two European countries over the next five years. And that’s just a drop in the bucket of its overall capex plans.
The total includes $2 billion for expansion in Germany, including of its AI infrastructure in Frankfurt, and $1 billion for its Netherlands operation and added AI capacity in its Amsterdam region.
In addition to AI, the ability to meet Europe’s stringent data sovereignty requirements seems to be a driving factor for Oracle. Sovereign cloud and AI were mentioned in press releases announcing both investments.
To the lay person, $3 billion likely seems like a lot. But the European spending will likely be just a fraction of Oracle’s broader capital investments.
Spread out evenly over five years, the $3 billion figure factors out to something like $150 million per quarter and less than $1 billion per year. For context, Oracle spent over $21 billion in capex in its fiscal 2025 (ended May 31, 2025).
Executives said on Oracle’s Q4 2025 earnings call last month that capex for its FY2026 will likely come in even higher – over $25 billion – as it works to fill its order backlog.
Oracle already touts more than 50 cloud regions across the globe, with upwards of 30 more in the works.“We are putting out as much capacity as we possibly can as quickly as we can,” CEO Safra Catz said. “I do believe that the 25 billion next year may turn out to be understated.”
That said, Oracle will soon end up with more than enough cash to fuel its spending spree. The company recently inked a game-changing deal that is expected to yield more than $30 billion in annual revenue starting in FY2028 (which starts June 1, 2027).