Oracle addressed customer concentration risk in its latest earnings call, highlighting its ability to shift AI computing capacity between customers within hours if a large customer fails to pay. With a remaining performance obligation of $523 billion, mostly due to a $300 billion deal with OpenAI, Oracle is heavily dependent on fulfilling these commitments. While Oracle can quickly reallocate capacity to mitigate risk now, an oversupply scenario in the future could be disastrous if a large customer defaults. Investors should closely monitor Oracle’s customer concentration risk and its dependence on OpenAI’s financial viability.

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