Oracle Launches AI Centre in Southeast Asia to Steer Competition

Core Viewpoint - Oracle Corporation's recent establishment of an AI Centre of Excellence in Singapore is perceived as a desperate measure to stay relevant amid fierce competition in the cloud and AI sectors in Southeast Asia [1] Financial Performance - Oracle's Q3 2025 earnings report showed concerning signs, with EPS at $1.47, missing estimates by $0.02, and revenues of $14.13 billion, which, despite a 6.40% year-over-year increase, fell short of projections by $259.18 million [2] - Software license revenues decreased by 8% to $1.1 billion, highlighting challenges in transitioning from legacy systems to cloud services [3] Competitive Landscape - AWS has announced an $8.3 billion investment in cloud infrastructure in Maharashtra, India, as part of a larger $12.7 billion investment plan by 2030, significantly overshadowing Oracle's regional efforts [4] - AWS is projected to contribute $15.3 billion to India's GDP and create over 81,300 jobs, showcasing the scale of its operations compared to Oracle [5] - Google has also intensified competition with a $1 billion investment in data centers in Thailand, expected to boost the local economy by $4 billion and create 14,000 jobs by 2029 [6] Technical Limitations - Despite claims from Oracle's CEO that Oracle Cloud is superior, the infrastructure only handles a fraction of the workloads managed by AWS, Azure, and Google Cloud [7] - Oracle's announcement of its "101st cloud region" is seen as lacking substance, as these regions are smaller and offer fewer services than those of competitors [7] - The capabilities of Oracle's AI infrastructure, such as the claimed "64,000 GPU, liquid-cooled NVIDIA GB 200 cluster," are inadequate compared to the extensive AI resources deployed by major competitors [8] Investment Outlook - The announcement of the AI Centre is viewed as more of a public relations effort rather than a significant investment, with no specific capital commitments disclosed [9] - Oracle's reported backlog growth to $130 billion raises concerns, especially given the ongoing compression in operating margins and high capital expenditure needs [10] - Operating cash flow barely covers capital expenditures, indicating constraints on funding true AI innovation [11] - Overall, Oracle's deteriorating financial metrics, increasing competition, and technical limitations suggest that the stock may be overvalued, making it a strong sell candidate for 2025 [12]