Oracle's Big Decision: Sets $20 Billion Limit for Artificial Intelligence Projects

Amid ongoing global discussions regarding the expenditure incurred on Artificial Intelligence (AI) in the technology sector, Oracle has taken an important decision. The company has set a financial funding limit of $20 billion for its AI ventures. The main objective of this strategy is to reduce dependence on external funding in the coming years and to curb debt and stock sales. Oracle's target is that the company will start generating positive cash flow by the financial year 2028. This step has been taken especially to reassure investors who are currently worried about infrastructure investments.

The main reason behind Oracle's decision is the heavy volatility witnessed in the US stock market. On Thursday, the American stock market suffered a loss of approximately $2.5 trillion, which was primarily driven by fears of a slowdown in AI-related investments. Due to heavy selling in technology stocks on Wall Street, the post-election rally was completely wiped out. Specifically, following the Democratic Party's victory in the midterm elections, fears spread among investors regarding impending restrictions on data center expansion and obstacles to AI infrastructure development in the US. According to ANI and CNN reports, a major decline was witnessed in the market due to this fear.

On Thursday, the Nasdaq Composite Index fell 5.52 percent to close at the level of 24,315.00, marking its largest single-day drop since April 2025. This index slipped more than 10 percent from its record level of last month, entering a correction zone. Similarly, the S&P 500 Index dropped 4.36 percent to 7,353, and the Dow Jones Industrial Average closed down by 1,833.06 points or 3.44 percent at 51,523.06. While the Dow Jones had recorded a surge of over 1,500 points on Wednesday—the largest jump since April 2025—Thursday's crash erased all those gains.

There was concern among investors that the Democratic Party's dominance in both houses could impact data center expansion. On Wednesday, shares of companies like Amazon, Meta, and Google were soaring, but on Thursday, investors changed their strategy. Heavy selling was witnessed in semiconductor and data center infrastructure companies. Broadcom registered a decline of 10 percent, Nvidia 9 percent, and Oracle nearly 7 percent. According to Keith Lerner, Chief Investment Officer at Truist Advisory Services, this volatility was an immediate reaction and should not be seen as a clear indicator of tech stocks' performance under Democratic control.

On the other hand, the situation in the Indian stock market appeared different. Despite global selling, the Indian market showed a strong recovery on Friday. Foreign investors purchased Indian shares worth ₹14,974.68 crore on Thursday, which boosted market confidence. On Friday, the Sensex closed up by 1,718.02 points or 2.17 percent at 81,028.02, and the Nifty 50 closed up by 493.75 points or 2.01 percent at 25,030.35. Indian investors earned ₹1 lakh crore in a single day on Friday. Since direct investment in AI infrastructure companies is lower in India and investor inclination leans towards traditional IT services, the Indian market remained more resilient.

Oracle Corporation is an American multinational computer technology company headquartered in Austin, Texas. It is known for the development and marketing of database software and technology, cloud engineered systems, and enterprise software products. Over the years, the company has maintained its strong position in the enterprise software market and is currently expanding into the field of cloud infrastructure as well.