Oracle denies OpenAI data center delays as Wall Street questions AI infrastructure buildout

Oracle reportedly delays several new OpenAI data centers because of shortages -- tight material and labor supply frustrate expansion plans, possibly by a year or more

Oracle has revised delivery schedules for several large AI data centers it is building for OpenAI from 2027 to 2028, Bloomberg reports, citing people familiar with the matter. The delayed facilities are parts of Oracle's commitments under the Stargate AI infrastructure program jointly announced in January by Oracle, OpenAI, and SoftBank Bloomberg's sources familiar with the projects reportedly blame shortages of skilled labor and 'materials' for the setback, though it is unclear whether by 'materials' they mean building materials, shortages of data center equipment, or shortages of materials for building out infrastructure surrounding AI data centers. Despite the delay from 2027 to 2028, the overall scope of the projects that Oracle will build for OpenAI remains unchanged, the report says. The delayed facilities are part of a contract between Oracle and OpenAI inked in July, under which the two parties plan to increase Stargate AI data center capacity to two million AI accelerators and 5 GW of power. Despite the revised timelines, the U.S.-based AI campuses are still planned on an unusually aggressive scale, and some of them are designed to rank among the largest data centers globally once completed. In fact, given the scope of the projects, delays and slipups are inevitable. Earlier this week, Clay Magouyurk, chief executive of Oracle, said that despite obvious bottlenecks, Oracle believes its global expansion plans were realistic. He pointed to 147 active regions, 64 more in development, and roughly 400 MW of data center capacity delivered in one quarter. One of the examples of how Oracle can manage building out a large data center is its SuperCluster in Abilene, Texas, which houses nearly 200,000 Nvidia GPUs, and which was built in several months. "Our SuperCluster in Abilene, Texas, is on track with more than 96,000 Nvidia Grace Blackwell GB200 delivered," Magouyurk told analysts and investors. "We also began delivering AMD MI355 capacity to customers this quarter." The head of Oracle also stressed that the company continues to see strong demand for AI capacity, but emphasized that the company only accepts orders if it feels confident that it can fulfill them. "Our pace of capacity delivery continues to accelerate," said Magouyurk. "We continue to see strong demand for AI infrastructure across training and inferencing. We follow a very rigorous process before accepting customer contracts. This process ensures that we have all the necessary ingredients to deliver to customer success at margins that make sense for our business."

Oracle says there have been 'no delays' in OpenAI arrangement after stock slide

Oracle CEO Clay Magouyrk appears on a media tour of the Stargate AI data center in Abilene, Texas, on Sept. 23, 2025. Oracle on Friday pushed back against a report that said the company will complete data centers for OpenAI, one of its major customers, in 2028, rather than 2027. The delay is due to a shortage of labor and materials, according to the Friday report from Bloomberg, which cited unnamed people. Oracle shares fell to a session low of $185.98, down 6.5% from Thursday's close. "Site selection and delivery timelines were established in close coordination with OpenAI following execution of the agreement and were jointly agreed," an Oracle spokesperson said in an email to CNBC. "There have been no delays to any sites required to meet our contractual commitments, and all milestones remain on track." The Oracle spokesperson did not specify a timeline for turning on cloud computing infrastructure for OpenAI. In September, OpenAI said it had a partnership with Oracle worth more than $300 billion over the next five years. "We have a good relationship with OpenAI," Clay Magouyrk, one of Oracle's two newly appointed CEOs, said at an October analyst meeting. Doing business with OpenAI is relatively new to 48-year-old Oracle. Historically, Oracle grew through sales of its database software and business applications. Its cloud infrastructure business now contributes over one-fourth of revenue, although Oracle remains a smaller hyperscaler than Amazon, Microsoft and Google. OpenAI has also made commitments to other companies as it looks to meet expected capacity needs. In September, Nvidia said it had signed a letter of intent with OpenAI to deploy at least 10 gigawatts of Nvidia equipment for the San Francisco artificial intelligence startup. The first phase of that project is expected in the second half of 2026, but in a November filing, Nvidia said "there is no assurance that we will enter into definitive agreements with respect to the OpenAI opportunity." OpenAI has historically relied on Nvidia graphics processing units to operate ChatGPT and other products, and now it's also looking at designing custom chips in a collaboration with Broadcom. On Thursday, Broadcom CEO Hock Tan laid out a timeline for the OpenAI work, which was announced in October. "It's more like 2027, 2028, 2029, 10 gigawatts, that was the OpenAI discussion," Tan said on Broadcom's earnings call. "And that's, I call it, an agreement, an alignment of where we're headed with respect to a very respected and valued customer, OpenAI. But we do not expect much in 2026." OpenAI declined to comment.

Wall Street Sphincters Tighten as Oracle Delays Its OpenAI Data Center Buildout

It turns out infinite growth might not actually be possible. On Friday, Bloomberg reported that Oracle will be delaying some of its data center projects for OpenAI for at least a year due to labor and material shortages. Wall Street, which is definitely not extremely nervous about the sustainability of an economy entirely propped up by investments in AI, is not handling it well, responding to the news with a sell-off of companies involved in AI infrastructure before trading closed. The delays will push the planned completion of the data center projects back from 2027 to 2028, which might not seem like the biggest deal in the world on paper, but the runway for AI companies to crack the revenue code and turn their extremely red balance sheets black is not that long. A year's delay in completing these data centers means a year of setback for training and deploying AI tools, which means a year's delay in finding out if all the money poured into these companies actually amounts to anything. There's certainly some truth to the cause of the delays, lest you worry that the wind is picking up near this house of cards. The Wall Street Journal recently reported that the data center rush has created a shortage of capable construction workers and driven up the wages of those who are available to take these jobs. Meanwhile, Trump's tariffs have made construction material harder to come by and, according to a recent report from Forbes, have contributed as much as $6 billion in additional costs to the AI buildout. But Oracle has always been something of a bellwether when it comes to the market's confidence in AI. Back in September, Oracle had a pretty rough quarterly earnings report, missing on its revenue and earnings projections, and producing net income that was flat year-over-year. And yet, it defied gravity and its stock soared thanks to the company's fat stack of remaining performance obligations -- financial agreements that will provide revenue that have not yet been fulfilled. The company had a projected $455 billion coming in, in no small part due to data center agreements with OpenAI. Suddenly, it feels like those commitments might not be the sure things the market has believed them to be. And it's far from the first indicator that Oracle's deals in particular may be more smoke and mirrors than racks and processors. Earlier this year, reports indicated that the Stargate project that Oracle and OpenAI are heavily involved in has also been moving significantly slower than expected. That didn't stop OpenAI CEO Sam Altman from announcing even more investments on this front a few months later, which, of course, pushed the market even higher. But if it's not yet clear to Wall Street that just announcing these multi-billion-dollar deals does not guarantee they'll ever actually materialize, it's at least started to give some of them a sense of queasiness.

Oracle denies report on OpenAI data center delays

Oracle denied on Friday a media report that it was delaying OpenAI-related data centers, following investor worries over its debt-fueled AI infrastructure buildout. Shares of Oracle, which had fallen 3.6% following the report, pared some losses to be down by 2.8% in afternoon trading. Oracle denied on Friday a media report that it was delaying OpenAI-related data centers, following investor worries over its debt-fueled AI infrastructure buildout. Bloomberg News had earlier in the day reported that Oracle had pushed back the completion dates for some data centers it is developing for OpenAI to 2028, a year later than planned, due to labor and material shortages. "There have been no delays to any sites required to meet our contractual commitments, and all milestones remain on track," Oracle spokesperson Michael Egbert told Reuters in an emailed statement. "We remain fully aligned with OpenAI and confident in our ability to execute against both our contractual commitments and future expansion plans," Egbert added. Shares of Oracle, which had fallen 3.6% following the report, pared some losses to be down by 2.8% in afternoon trading. Other AI-related shares also tumbled, with chip giant Nvidia, Advanced Micro Devices, Micron and Arm Holdings down between 2% and 4.5%. The Bloomberg report came a day after Oracle logged its biggest stock drop since late January, following earnings that showed rising spending and a weak outlook for a company that is increasingly reliant on OpenAI. Long a smaller cloud-computing player, Oracle has leaped into the artificial intelligence infrastructure race this year on the back of a $300 billion OpenAI data-center deal. But the buildout has forced the company to borrow aggressively. Investors, spooked in recent weeks by signs that Google was pulling ahead in the AI race and by Oracle's rising debt load, have sold off the company's stock and bonds. The cost of insuring Oracle's debt against default surged on Thursday to its highest in at least five years and was up again on Friday. The shares are up just 13% now for the year, having erased all the gains from a 36% jump in September, when it reported a massive backlog of over $450 billion - mostly tied to OpenAI. Investors have been growing more picky in the AI space, with less willingness to indiscriminately reward spending on AI, even as they bet on its long-term potential. OpenAI did not immediately respond to a Reuters request for comment. After the Bloomberg report, some analysts said the news showed bottlenecks beyond chips were emerging for the data-center expansion tech companies are financing with hundreds of billions of dollars in investment. "Concerns about the ability to build data centers due to construction delays, power availability and other practical factors are becoming a much bigger factor than the expected demands for AI capabilities," Bob O'Donnell, chief analyst at TECHnalysis Research, said. But he added that the market has become more sensitive to news of AI delays as investors scrutinize payoffs from the spending. Broadcom was also down more than 11% on Friday, after warning that rising sales of lower-margin custom AI processors were squeezing profitability, stirring fears the business may be less lucrative.

Oracle Pushes Back On OpenAI Data Center Delay Claims - Oracle (NYSE:ORCL)

Oracle Corp. (NYSE:ORCL) stock declined Friday as markets weighed execution risks around the company's rapidly scaling AI and cloud capacity buildout. The pullback followed a Bloomberg report that said Oracle has shifted timelines for several OpenAI data centers to 2028 from 2027, citing labor and material shortages, according to people familiar with the work. Moreover, the company is still executing a $300 billion contract to supply computing capacity for OpenAI's models. Also Read: Semiconductor Stocks Sell Off After Oracle's Results Spoil AI Party Despite the reported timeline changes, the U.S. projects remain on an aggressive schedule and are expected to rank among the largest data centers globally once completed, the report added. Oracle Co-CEO Clay Magouyrk said the company remains confident in its ability to deliver capacity worldwide. He added that the first data center Oracle is developing for OpenAI in Abilene, Texas, remains on track, with more than 96,000 Nvidia Corp. (NASDAQ:NVDA) chips already delivered. Oracle Pushes Back On Delay Narrative Oracle later pushed back on the delay narrative in a statement cited by Reuters, saying site selection and delivery timelines were established in close coordination with OpenAI following execution of the agreement and were jointly agreed upon. The company said there have been no delays to any sites required to meet its contractual commitments and that all milestones remain on track. ORCL Price Action: Oracle shares were down 3.08% at $192.72 at the time of publication on Friday, according to Benzinga Pro data. Read Next: Oracle Reaches Hyperscaler Heights With $300 Billion Bet On AI: Analyst Photo via Shutterstock ORCLOracle Corp$191.71-3.59%OverviewNVDANVIDIA Corp$177.38-1.96%Market News and Data brought to you by Benzinga APIs

Oracle denies report on OpenAI data center delays

Oracle denied on Friday a media report that it was delaying OpenAI-related data centers, following investor worries over its debt-fueled AI infrastructure buildout. Bloomberg News had earlier in the day reported that Oracle had pushed back the completion dates for some data centers it is developing for OpenAI to 2028, a year later than planned, due to labor and material shortages. "There have been no delays to any sites required to meet our contractual commitments, and all milestones remain on track," Oracle spokesperson Michael Egbert told Reuters in an emailed statement. "We remain fully aligned with OpenAI and confident in our ability to execute against both our contractual commitments and future expansion plans," Egbert added. Shares of Oracle, which had fallen 3.6 per cent following the report, pared some losses to be down by 2.8 per cent in afternoon trading. Other AI-related shares also tumbled, with chip giant Nvidia, Advanced Micro Devices, Micron and Arm Holdings down between two per cent and 4.5 per cent. The Bloomberg report came a day after Oracle logged its biggest stock drop since late January, following earnings that showed rising spending and a weak outlook for a company that is increasingly reliant on OpenAI. Long a smaller cloud-computing player, Oracle has leaped into the artificial intelligence infrastructure race this year on the back of a US$300 billion OpenAI data-center deal. But the buildout has forced the company to borrow aggressively. Investors, spooked in recent weeks by signs that Google was pulling ahead in the AI race and by Oracle's rising debt load, have sold off the company's stock and bonds. The cost of insuring Oracle's debt against default surged on Thursday to its highest in at least five years and was up again on Friday. The shares are up just 13 per cent now for the year, having erased all the gains from a 36 per cent jump in September, when it reported a massive backlog of over $450 billion -- mostly tied to OpenAI. Investors have been growing more picky in the AI space, with less willingness to indiscriminately reward spending on AI, even as they bet on its long-term potential. OpenAI did not immediately respond to a Reuters request for comment. After the Bloomberg report, some analysts said the news showed bottlenecks beyond chips were emerging for the data-center expansion tech companies are financing with hundreds of billions of dollars in investment. "Concerns about the ability to build data centers due to construction delays, power availability and other practical factors are becoming a much bigger factor than the expected demands for AI capabilities," Bob O'Donnell, chief analyst at TECHnalysis Research, said. But he added that the market has become more sensitive to news of AI delays as investors scrutinize payoffs from the spending. Broadcom was also down more than 11 per cent on Friday, after warning that rising sales of lower-margin custom AI processors were squeezing profitability, stirring fears the business may be less lucrative.

Due to shortages Oracle delays several data centers intended for OpenAI until 2028

Oracle has decided to push back the delivery of several data centers planned as part of its strategic partnership with OpenAI, until 2028, according to reports by Bloomberg. These delays concern sites originally expected in 2027 and are said to be due to difficulties sourcing materials as well as a labor shortage. Despite these adjustments, Oracle maintains high ambitions for the development of its infrastructure, notably in the United States. In June, Oracle signed a large $300bn contract with OpenAI to provide the computing capacity needed to train and deploy its artificial intelligence models. The first data center linked to this partnership, located in Abilene, Texas, remains on track with the original schedule. Clay Magouyrk, Oracle's co-CEO, confirmed this week that more than 96,000 Nvidia chips have already been delivered to the site.