Oracle's $664 billion backlog requires spending before revenue arrives

A $664 billion backlog that spends first

Oracle's remaining performance obligations, revenue under agreements it has not yet earned, reached $664 billion, up $209 billion from a year earlier, 247wallst reported on 12 October. That backlog is the central number in Oracle's AI buildout: work the company has signed but cannot book until it delivers capacity. Fiscal first-quarter revenue rose 30% to $19.3 billion, and cloud infrastructure revenue grew 121% to $7.4 billion. The gap between the backlog and quarterly revenue shows the scale of construction still ahead. Capital spending reached $28 billion in the quarter, while free cash flow was -$5 billion. Management expects $90 billion to $95 billion of capital spending this fiscal year.

Oracle must build before it can bill. Briefs.co reported that Oracle was the first major name to tip into negative free cash flow because of AI data center spending.

For AI customers, the risk is timing. A delayed data center can push back contracted capacity, and Oracle's customer contracts carry fixed delivery dates, 247wallst reported. For investors, the question is whether the upfront bill is covered by customer advances and supplier financing, not just by future revenue, Briefs.co reported. Across the five largest data center players, future lease commitments total $1.3 trillion and other purchase commitments reach $1.9 trillion, according to Bloomberg. Those totals exclude current leases and debt, and each company discloses commitments differently, making direct comparison difficult.

Trucked gas as schedule insurance

Oracle has used trucked natural gas to keep construction on schedule, according to 247wallst. A data center outside Salt Lake City ran on gas delivered by truck for more than a year while its pipeline was built. Oracle now uses or is considering the same approach at three sites, including the 2.45-gigawatt Project Jupiter in New Mexico. New Mexico's state land office twice refused rights-of-way for the Energy Transfer pipeline, pushing its start to February. Jack Weixel estimates that trucked gas costs roughly four times the price of gas at a major pipeline hub once delivered, and Ellie Holbrook estimates that one large trailer would supply about 40 minutes of electricity at a 100-megawatt load. Oracle sent a force majeure notice to the Jupiter developer in late September but says Jupiter remains on schedule for 2028.

The fuel premium is the price of hitting contract dates. Missing an agreed delivery date on a hyperscale deal risks penalties and delayed revenue that would likely exceed the fuel bill, 247wallst reported.

Oracle accepts that cost, which shows how permitting delays can turn into operating costs. The Jupiter force majeure notice shows the strain, even as Oracle says the project remains on schedule for 2028. The workaround is not a permanent fix: pipelines, utility interconnection queues and state land offices each run on their own calendars, while Oracle's customer contracts carry fixed delivery dates. Certarus supplied the gas in Utah, and VoltaGrid trucks are powering early work at the OpenAI campus in Shackelford County, Texas.

Who funds the build

Oracle is not paying for the build alone. In February 2026, the company announced plans to raise $45 billion to $50 billion through debt and equity to expand cloud infrastructure for customers including OpenAI, according to coinpaper. A separate Stargate project in Michigan involves Related Digital, Oracle, OpenAI and Blackstone, with financing from infrastructure investors and long-term debt backed by PIMCO-managed funds. OpenAI's future payments help support the investment, while Oracle and its investors provide capital to build computing capacity. OpenAI does not necessarily own the buildings or carry the construction debt directly. That structure separates the company using a data center from the company funding it. Oracle plans to return to positive free cash flow in 2028 using supplier financing and customer advance payments, Briefs.co reported on 31 October.

The balance sheet carries the timing risk. Meta reported more than $800 billion in future spending, with slightly under half tied to data center leases that have not started and may run up to 30 years, Bloomberg reported. Google reported more than $1 trillion in obligations, almost eight times what it listed a year earlier, according to its regulatory filing. Coinpaper reported that the result is a financing chain where customer contracts support borrowing, but the upfront cash comes from investors and suppliers. Coinpaper also reported that if OpenAI or Anthropic fails to generate sufficient revenue, the financial consequences could spread across data center owners, banks and bondholders.