Oracle's AI Ambitions Face Scrutiny as Report Questions $500B Stargate Role

A new report has cast a shadow over Oracle's position in the massive Stargate AI project, sending the company's stock lower and prompting a sharp reassessment of its potential windfall from the $500 billion initiative. The sell-off highlights the fine line Wall Street is walking between the promise of historic AI spending and the complex, often opaque, realities of multi-billion dollar partnerships.

The trigger was an investigation by The Information, which suggested Oracle's involvement in the Stargate venture—a centerpiece of President Trump's 2025 AI infrastructure push—may be more limited than investors had believed. While Oracle was a named partner at the project's high-profile unveiling, the report indicates its role could be narrower than that of lead drivers like SoftBank and OpenAI, potentially affecting billions in expected revenue.

When Stargate was announced, Oracle co-founder Larry Ellison stood alongside the President and other executives, positioning the company as a core technology beneficiary. The market had priced in a significant share of the data center construction and cloud services contracts for the enterprise giant, which has been aggressively expanding its cloud infrastructure to meet AI demand.

Oracle's broader cloud business remains robust, with recent earnings showing strong growth tied to AI workloads. Company leadership has spoken of "unprecedented" demand. However, the market reaction to the report was swift, erasing billions in value and revealing how much of Oracle's premium valuation was pinned on specific, optimistic assumptions about Stargate.

The episode serves as a case study in the current AI investment frenzy. Grand announcements can drive stock prices, but execution and the fine print of partnership agreements determine where the money actually flows. As construction on Stargate's first sites begins, Oracle now faces increased pressure to clarify its exact role in the megaproject, proving it is not just near the gold rush, but actively mining it.