Recently, Oracle Corporation revealed the construction cost figures for its artificial intelligence (AI) data centers. In its comprehensive quarterly report, the company detailed lease payment obligations that soared to an eye-popping $248 billion, with the lion's share tied to data center and cloud capacity arrangements. This sum marks a staggering increase of nearly $150 billion compared to the figures released in September, and Oracle's future lease commitments far outstrip those of its industry counterparts. Such a massive financial commitment could potentially stir up investor anxieties regarding Oracle's AI infrastructure blueprint, especially considering that Oracle's property lease durations are relatively lengthy, whereas the contract terms of its key clients are much shorter.

Oracle's capital outlays for the current fiscal year are projected to skyrocket to $50 billion, with cumulative expenditures over the next five years potentially surpassing the $300 billion mark. This could translate into four straight years of negative free cash flow, with the bulk of investments earmarked for equipment acquisitions. To ease the strain on cash outflows, Oracle has embraced a leasing model, with its future lease obligations extending over 15 to 19 years and averaging roughly $14.6 billion per annum.

If everything proceeds according to plan, these expenditures should remain manageable, as Oracle expects its cloud infrastructure business to rake in annual revenues of $166 billion by 2030. However, the company's annual report also sounds a note of caution about the risks associated with overestimating demand. Given the short-term nature of its customers' contracts, there are external concerns about whether Oracle can deliver on its promises (there was a mistake in the original text, it should be "Oracle" instead of "OpenAI").

While the current demand for AI computing capacity outstrips supply, some experts still harbor reservations about the potential perils of oversupply and technological obsolescence. Oracle's stock price has already relinquished 44% of its gains, and escalating financing costs have made expansion a more costly endeavor. The colossal lease figures could further amplify investor apprehensions.