Oracle carried $77.8 billion of computer, network, machinery and equipment at the end of August, three times the $25.5 billion it had in buildings, the Financial Times reported on 12 November in a piece on market worries after the Democrats’ midterm wins. Oracle’s own 10-Q shows the gap widening in a single quarter: the equipment line rose $18.1 billion from 31 May while buildings rose $4.3 billion, or $4.24 of equipment for every $1 of buildings, by our arithmetic.
Another $48.5 billion sat in construction in progress, which Oracle says is mostly servers, networking equipment and leasehold improvements to be deployed at its data centers. Equipment and construction in progress together were 82.2% of its gross property, plant and equipment, by our arithmetic.
Business Pill · Capex and Depreciation
An evergreen Business Engineer explainer on capital spending and depreciation in AI hardware. It teaches the general idea only and does not discuss Oracle or the midterms.
The key insight: Oracle’s equipment line rose $18.1 billion in the quarter to 31 August while its buildings rose $4.3 billion: $4.24 of servers, networking gear and machinery for every $1 of buildings, by our arithmetic from its 10-Q. The ratio of the two stood at 3.0, back above its 2.8 of the previous two year-ends.
The FT’s Conrad Quilty-Harper wrote that “Market jitters about artificial intelligence have erupted since the Democrats swept to victory in the US midterm elections”. Investors, he wrote, “are rattled by Democrat promises to halt the building of data centres across the country”.
Three states at the centre of the build-out, Texas, Georgia and Ohio, “elected Democratic candidates who have pledged to crack down on building data centres”, the FT says. AP called those governor races for Gina Hinojosa, Keisha Bottoms and Amy Acton, as we reported with the three states’ data center tax breaks.
The idea of a pause is not confined to one party. Senator Josh Hawley, a Missouri Republican, listed a “MORATORIUM on data centers” among five priorities for Senate Republicans on 11 November, as we reported.
The FT quotes Pat Lynch, who leads data centre advisory services at CBRE and “likes to refer to the typical modern data centre as a powered shed”. The FT adds: “The shed is now one of the cheaper parts of the product.” It cites Oracle’s most recent financialstatements as the example.
Oracle’s gross property, plant and equipment by line on four dates, in billions of dollars. From its 10-K filings for fiscal 2025 and 2026 and its 10-Q for the quarter ended 31 August 2026; the equipment-to-buildings ratios are our arithmetic.
What Oracle’s Filings Show
Oracle’s 10-Q for the quarter to 31 August lists computer, network, machinery and equipment at $77,755 million gross, up from $59,634 million on 31 May. Buildings and improvements were $25,539 million, up from $21,263 million. The filing says the equipment line is “Comprised primarily of servers and networking equipment with estimated useful life of six years”; buildings carry useful lives of 1 to 40 years.
Construction in progress rose to $48,546 million from $39,973 million, up 21.4%, by our arithmetic. Capital expenditures were $28,499 million in the three months, against $8,502 million a year earlier, the 10-Q says: 3.4 times as much, by our arithmetic. Depreciation was $3.2 billion, against $1.4 billion.
The Ratio Over Two Years
From Oracle’s fiscal 2026 and fiscal 2025 annual reports, equipment was 3.2 times buildings on 31 May 2024, 2.8 times on 31 May 2025 and 2.8 times on 31 May 2026, by our arithmetic. Over those two years buildings grew faster than equipment.
The quarter to August moved the other way, taking the ratio back to 3.0. From 31 May 2024 to 31 August 2026, gross property, plant and equipment grew 4.4 times to $153.6 billion, buildings 3.9 times, equipment 3.7 times and construction in progress 8.6 times, by our arithmetic.
Oracle’s gross equipment, construction in progress and buildings on 31 May and 31 August 2026, in billions of dollars, from its 10-K and 10-Q. Changes are our arithmetic.
The Suppliers Around the Shed
The FT cites trade publication EC&M: the 50 largest US electrical contractors made $80.4 billion in revenue in 2025, up 40% on the year before. EC&M says they “capitalized on an unprecedented wave of data center and power infrastructure construction”.
In Abilene, Texas, Rosendin Electric has a $3.4bn contract for a data centre, and Crusoe is finishing eight buildings for the Stargate Project, the AI venture backed by OpenAI, Oracle and SoftBank, the FT reports. Local fights touched $17 billion of US data center plans in the first 11 days of November, by our count.
The Structural Read
As we read Oracle’s filings, most of the money tied to its data centers sits in equipment and construction in progress, 82.2% of gross property, plant and equipment; the buildings that permits and moratoriums govern are 16.6%.
As we read the FT piece alongside the filings, the part of the build-out that politicians can pause, the shed, is the smaller line on Oracle’s balance sheet, while the larger line has a six-year life.
Oracle Form 10-Q, quarter ended 31 Aug 2026
“Comprised primarily of servers, networking equipment and leasehold improvements to be deployed at our data centers”
Three Implications
FOR ORACLE’S BALANCE SHEET Construction in progress was $48.5 billion on 31 August, up 21.4% in the quarter, by our arithmetic, and the 10-Q describes it as mostly equipment to be deployed at its data centers.
FOR SUPPLIERS The 50 largest US electrical contractors made $80.4 billion in 2025, up 40%, EC&M reported, and the FT names Rosendin’s $3.4bn Abilene contract.
FOR THE POLICY DEBATE The FT reports pledges in Texas, Georgia and Ohio, and a Republican senator, Josh Hawley, has also called for a moratorium, as we reported.
The framework reads: “This is not a continuation of the cloud capex cycle.”
As we read it, Oracle’s balance sheet shows that difference in one ratio: $4.24 of equipment for every $1 of buildings in the quarter to August, by our arithmetic, with equipment on lives of up to six years against up to 40 for buildings. The framework predates the FT report and does not discuss it.
What Is Not Established
The property note we read in Oracle’s filings does not split equipment or construction in progress by site or state, so it does not show how much sits in Texas, Georgia or Ohio. The 10-Q covers a quarter that ended before the 3 November vote. The quarterly changes are net balance-sheet movements, not purchases: they also reflect transfers out of construction in progress and disposals.
The FT does not list the specific pledges or bills it refers to. We did not contact Oracle for this piece. This is not investment advice.
This Week In The AI Supercycle
The Great Convergence of Capital, Power, and Geopolitics
This week’s issue: for two years the AI build-out was priced as a supply story, and last week as a credit story. This week it was priced as a permission story, and the answer arrived as a cost, not a ban.
Oracle’s equipment line reached $77.8 billion at the end of August, 3.0 times its buildings, and rose $4.24 for every $1 of buildings in the quarter, by our arithmetic from its 10-Q. Construction in progress, mostly servers and networking gear to be deployed at its data centers, was another $48.5 billion. The FT reports investors weighing Democratic pledges to curb data centre building in Texas, Georgia and Ohio.
A note on sourcing. We read the Financial Times article in full, and Oracle’s Form 10-Q for the quarter ended 31 August 2026 (property, plant and equipment note and cash flow statement) and its Form 10-K filings for fiscal 2026 and fiscal 2025 (property, plant and equipment notes) on SEC EDGAR. The EC&M figures are from the introduction to its 2026 Top 20 Electrical Contractors gallery.
Ratios, changes and shares are our arithmetic. Election calls and the Hawley post are from our earlier, linked pieces. We did not contact Oracle for this piece.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
