Oracle forecasted lower than expected sales and profit, signaling a $15 billion spike in spending for AI cloud centers. Shares fell 10% in response. Analysts are concerned about Oracle’s ability to turn big investments into profit. Oracle also missed revenue and profit estimates for the third quarter and cloud sales growth expectations.

The company reported $16.06 billion in total revenue for the second quarter, falling short of analyst estimates. Adjusted operating income also missed Wall Street targets. Analysts worry about Oracle’s OpenAI deal and aggressive AI spending. Future cloud contract metrics fell below expectations, generating uncertainty among investors.

Oracle CEO Clay Magouyrk discussed financing cloud centers on a conference call, considering models where customers can bring their own chips. The company posted a second-quarter adjusted profit of $2.26 per share, above analyst estimates, thanks to a one-time $2.7 billion gain from selling its stake in Ampere Computing. Oracle plans to remain neutral in chip selection for data centers.

Larry Ellison, Oracle chairman, explained that the company sold its Ampere shares to maintain chip neutrality in data centers. Oracle will continue to purchase Nvidia chips but is prepared to deploy any chips customers prefer. Oracle is constructing large data centers for OpenAI with plans for custom AI chips. Nvidia and Broadcom stocks dipped slightly after Oracle’s announcement.

Read more at Yahoo Finance: Oracle forecasts miss Wall Street targets while spending rises, shares slide 10%