Oracle renews expiring AI contracts at 20% higher rates as GPU demand surges

Oracle just proved that in the AI gold rush, even old shovels sell at a premium. The company disclosed during its Q1 FY2027 earnings call that it renewed or resold all of its expiring GPU capacity at prices roughly 20% higher than prior contracts. The kicker: most of those GPUs are over four years old. The numbers behind the pricing power Oracle’s GPU utilization rate hit 97.9% during the quarter. The demand side of the equation is equally striking. Oracle booked more than $30 billion in new AI cloud contracts during Q1, pushing its remaining performance obligations to $664 billion. That figure rose $26 billion from the prior quarter and $209 billion compared to a year ago. Oracle delivered more than 300,000 GPUs to its AI cloud customers during the quarter, tripling the output from Q4 FY2026. The company also brought an additional 850 megawatts of AI capacity online. The client roster reads like a who’s who of the AI arms race: OpenAI, xAI, Meta, NVIDIA, and AMD. Why old GPUs are still commanding premium prices The AI industry faces acute shortages of new NVIDIA GPUs, creating a bottleneck that has rippled through every major cloud provider. Oracle’s strategy effectively exploits ...