Oracle Corporation is charting new waters as it embarks on its ambitious Stargate project, aimed to heavily influence both artificial intelligence (AI) infrastructure and the biomedical sector. During the company's Q3 2025 earnings call, CTO Larry Ellison revealed the bold initiative, which has yet to yield any signed contracts, is projected to revolutionize cancer diagnostics and treatments, setting the stage for the development of potential cancer vaccines.
Despite the absence of Stargate-related contracts, Oracle reported remarkable growth with $130 billion noted as Remaining Performance Obligation (RPO) this quarter, which reflects their contracted revenue for undelivered products or services. This figure marks a significant increase from $97 billion last quarter and $80 billion from the previous year, showcasing a remarkable 63 percent year-over-year growth, signaling strong demand for its services.
Ellison expressed hope, stating, "We expect to sign our first large Stargate contract fairly soon", underlining the optimism surrounding the project's potential. Safra Catz, CEO of Oracle, added, "This RPO will help drive a 15 percent increase in Oracle's overall revenue in our next fiscal year beginning this June." The ambitious Stargate initiative involves collaboration with OpenAI, SoftBank, and Abu Dhabi's MGX, set to collectively invest $500 billion to deploy large data centers across the United States.
The initial phase of the Stargate project entails Oracle deploying 64,000 Nvidia GB200s for OpenAI at the Abilene, Texas data center, emphasizing Oracle's commitment to advancing AI training and inferencing businesses. The Q3 revenue for Oracle reached $14.1 billion, up 6 percent year-over-year, with net income climbing to $2.9 billion—a notable 22 percent rise year-over-year.
While the previous quarter saw revenue of $14 billion and net income of $3.15 billion, Catz stated Oracle's cloud revenue, including Infrastructure as a Service (IaaS) and Software as a Service (SaaS), reached $6.2 billion, marking a 23 percent increase year-over-year. Earnings per share (EPS) rose to $1.02, yet this performance fell short of analyst expectations.
Following the earnings report, Oracle's shares initially dipped from $154.25 to $139.28 but stabilized at around $144, indicating investor caution amid financial performance concerns. Catz elaborated on the company’s continuous growth, noting Oracle crossed 100 cloud regions and anticipates doubling its available power capacity by the end of the year.
“We expect fiscal year 2025 capex to amount to around $16 billion, which is more than double what it was last year,” Catz commented, elaborately explaining the need for increased capital expenditures due to demand from both the RPO growth and pipeline demand. The company incurred $5.9 billion of capital expenditure this quarter, growing from $3.97 billion last quarter.
Ellison justified Oracle's relatively lower capex compared to competitors like Microsoft, who reported $22.6 billion last quarter and $80 billion planned for AI data centers this year, by highlighting Oracle's strategy to launch smaller data centers, growing based on demand.
"We see significant demand with GPU consumption for AI training surging 244 percent over the past 12 months," Ellison noted. To complement the anticipated surge, Oracle is launching the Oracle AI Data Platform, which connects prominent AI models, such as OpenAI's ChatGPT and Meta's Llama, directly to the Oracle Database.
Meanwhile, the healthcare innovations stemming from the Stargate initiative spotlight the urgency for modernized cancer diagnostics. Larry Ellison emphasized the significance of the AI project's capabilities during remarks made at the White House last month, asserting it could pave the way for the United States to develop groundbreaking cancer vaccines.
This optimism faces challenges due to outdated policies affecting Medicare's diagnostic testing access. Following the recent Local Coverage Determination (LCD) from Medicare Administrative Contractors (MACs) like Novitas Solutions and First Coast Service Options (FCSO), nine significant cancer diagnostic tests have lost coverage, threatening the progress of precision medicine across the nation.
"Innovators should be rewarded for propelling the future of care and treatment options for millions of Americans, rather than punished by these antiquated policies," noted Peter J. Pitts, president and co-founder of the Center for Medicine in the Public Interest. He stressed the importance of early detection, emphasizing how advancements in diagnostic testing could improve treatment outcomes and save lives.
Nevertheless, as privatized entities like MACs limit the availability of cancer screenings, the very essence of future healthcare innovation remains at risk. Ellison’s Stargate initiative serves as both promise and cautionary tale—while its potential could lead to significant advancements, structural barriers within the healthcare system may impede direct benefits to American patients.
Indeed, innovation must continue alongside regulatory reform to fully realize the hopes set forth by the Stargate initiative, ensuring access to cutting-edge treatments rather than constraining them. With demands for increased Congressional oversight over CMS and their MAC processes growing ever louder, the path forward must prioritize patient welfare and endorse the very innovations set to redefine modern medicine.
Only time will reveal whether the Stargate initiative will fulfill its transformative promises, as Oracle tirelessly works on technological advancements and reshapes its business to meet the demands of advancing AI and healthcare sectors.