Impact of AI data center buildout

  Oracle already had a lot of contracts around the Gulf, and it also had a strong business relationship with one of China’s most important A.I. companies, ByteDance. Oracle was the U.S. cloud provider for the U.S. division of ByteDance’s TikTok, storing and securing the data of the app’s 100 million American users.

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 In late 2022, ByteDance acknowledged that its employees had accessed the I.P. addresses of two American tech reporters. (ByteDance said it fired the people involved and tightened its protocols so that it could never happen again.)

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 With the Biden plan dead, Oracle was free to operate its data center complex in Malaysia as it saw fit. By the end of June, the facility was on track to become the second-biggest in the world. Oracle doesn’t release the names of its customers there, but by studying its output, an independent A.I. research firm, SemiAnalysis, determined that the facility was feeding most of its computing power to ByteDance. An analyst at the tech-focused think tank ChinaTalk, Aqib F. Zakaria, ran his own numbers and arrived at a startling conclusion: Oracle was providing a staggering 22.6% of China’s known A.I. computing power.

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  Even more striking was Oracle’s so-called debt-to-equity ratio, which stood at around 500% — meaning that it had $5 of debt for every $1 of shareholder equity. By comparison, Amazon’s was around 50%, and Alphabet’s was considerably lower still.

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  Since October 2022, according to a Morgan Stanley analysis, A.I.-related stocks were responsible for as much as 75% of the returns of the S&P 500. During the first half of 2025, data centers accounted for 92% of America’s GDP growth, according to a calculation by the Harvard Kennedy School economist Jason Furman.

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  Last fall, Gita Gopinath, a former chief economist at the International Monetary Fund, writing in The Economist, estimated that an A.I. crash would wipe out $20  trillion in American wealth — far more than the dot-com crash in 2000 or even the 2008 financial crisis.

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  The more salient question may be how big a bubble, and also what will happen if it bursts. One macroeconomic research firm, MacroStrategy Partnership, has estimated that the A.I. bubble is 17 times as large as the dot-com bubble and four times as large as the 2008 housing bubble.

source: https://www.nytimes.com/2026/07/31/magazine/larry-ellison-ai-oracle.html?unlocked_article_code=1.11A.vzkn.HCHDjwhSAmRQ&smid=url-share