Oracle’s $664 billion AI backlog comes with a hefty execution bill

Oracle has a record order book. It is also spending heavily, and burning cash, to fill it. The company’s fiscal Q1 2027 report showed remaining performance obligations of $664 billion as of August 31, 2026. That figure is up $209 billion, or 46%, from a year earlier. Remaining performance obligations are contracted revenue Oracle has signed but not yet delivered. The question now is less about demand and more about timing. Can Oracle turn signed contracts into running data centers, and then into cash, before the bills catch up? The numbers behind the backlog The jump in Oracle’s backlog came largely from more than $30 billion in new artificial intelligence cloud contracts. Revenue is starting to follow. Oracle’s cloud infrastructure revenue climbed 121% year-over-year to $7.4 billion in the quarter. On the physical side, Oracle delivered 850 megawatts of AI capacity during the quarter. It also deployed more than 300,000 GPUs. GPU utilization ran at roughly 98%. Oracle expects nearly half of the backlog to convert into revenue over the next three years. About 13% is expected to turn into revenue within the next year. The cost of keeping up Oracle’s quarterly capital expenditures cam...