WARNING: Oracle's AI obsession could mean higher prices and worse support
(2026/04/13)
- Reference: 1776098199
- News link: https://www.theregister.co.uk/2026/04/13/oracle_job_losses_ai_impact_support/
- Source link:
Oracle customers have been warned to watch for changes in support and pricing as Larry Ellison’s company makes huge datacenter spending commitments to support its AI ambitions.
Advisors in Oracle negotiations said support levels are declining, while costs might increase as discounts disappear. Others have warned of a tougher approach to contract negotiations.
Oracle is aggressively expanding AI datacenter capacity to serve demand tied to customers and partners including OpenAI, xAI, Meta, Nvidia, and AMD. The deal for OpenAI alone is set to be worth about $300 billion over five years.
[1]
Widespread reports of [2]layoffs affecting thousands of staff came as [3]investor concerns grew over how Oracle would finance its AI datacenter build-out, while borrowing heavily to support the expansion.
[4]
[5]
In March, [6]Oracle increased the estimated cost of its fiscal 2026 restructuring plan by $500 million, taking the total to as much as $2.1 billion, as observers anticipated broader job cuts.
Oracle previously raised [7]$18 billion in debt and has since outlined plans to raise far more, as it funds datacenter investments aimed at meeting surging demand from AI model builders and enterprise customers. Ratings agency Moody’s warned of further borrowing and negative free cash flow as Oracle ramps up its AI infrastructure investment.
[8]
Nick Walter, CTO of professional consulting at commercial advisory firm House of Brick Technologies, said that there were plenty of anecdotal reports that Oracle support outcomes are getting worse, meaning slower service, less skilled help, and “more Oracle Support responses that were obviously written by AI.”
House of Brick had also seen a recent surge in customers asking for help in reducing Oracle Cloud Infrastructure (OCI) usage or help in negotiation with Oracle over long-term OCI deals, he said. “Many customers who adopted OCI in the last three to five years are suddenly finding out that their renewals are much more expensive because Oracle has eliminated or reduced enterprise discounts, and they are being forced close to public listed pay-as-you-go prices.”
Customers were also seeking help in response to pressure on Java, with audits and sales pushes and “scary-sounding threats.”
[9]
“This is not a new phenomenon but pressure continues and Java is the main front in Oracle's war against their customer's pocketbook,” he said.
Craig Guarente, founder and CEO of Palisade Compliance, said that Oracle was no longer simply putting pressure on customers to license Java; it was conducting official audits. “We've definitely seen in the last few months a return to classic Oracle auditing practices,” he said.
In 2023, Oracle changed its Java SE subscription model, shifting from a per-user or per-processor basis to per-employee. Critics called the move "predatory" as organizations that were using little Java but had a large number of employees could be hit hard by the cost increase. Later that year, research from Gartner showed that costs could be between two and five times greater under the new licensing model for using the same software.
Guarente also warned of price hikes at OCI contract renewal. “If you're not adequately protected, then we're getting 9 percent or 10 percent for long term lock in. It all goes back to that original purchase. You had some flexibility in there if you were thoughtful in how you negotiated those contracts. But if you signed the local standard agreement, there's no price protection.”
Eric Guyer, founding partner at Oracle and SAP advisory and consulting firm Remend, pointed out in [10]a social media post that the margins in software support were much higher than in datacenters.
[11]Oracle cuts jobs across sales, engineering, security
[12]DXC lands Metropolitan Police outsourcing deal that could climb to £1B
[13]'Uncle Larry's biggest fan' cut by email in early morning Oracle layoff spree
[14]Oracle: AI agents can reason, decide and act - liability question remains
“This means the value to Oracle of your software support payments is increasing, desperately so, whereas the value to you is diminishing, and at an increasing rate. I mean this both technically via waning innovation and the more than 8 percent annual inflationary adjustments,” he said.
Customers are also concerned about the long-term impact of the job losses on their relationship with Oracle, Guyer told The Register .
“The trend in license negotiations is only indirectly related to Oracle’s shift for now. The layoffs mean companies have lost one or more of their sales contacts. But for apps or the more strategic long-standing relationships, this means customers are wondering what this loss of institutional knowledge will mean for them. I’m not hearing customers wonder if Oracle is de-prioritizing its legacy software business just yet, although I see this as an obvious outcome,” he said.
The Register asked Oracle for comment and we'll update this article if we hear back. ®
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[2] https://www.theregister.com/2026/03/31/oracle_cuts_jobs/
[3] https://www.theregister.com/2026/01/29/oracle_td_cowen_note/
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[6] https://www.theregister.com/2026/03/12/oracle_increases_restructuring_fund_for/
[7] https://www.theregister.com/2025/09/25/oracle_18_billion_debt/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ad1nhlL8mRhzNef3MtCSHwAAAdQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[10] https://www.linkedin.com/feed/update/urn:li:activity:7448165367295815681/
[11] https://www.theregister.com/2026/03/31/oracle_cuts_jobs/
[12] https://www.theregister.com/2026/04/08/dxc_met_police_contract/
[13] https://www.theregister.com/2026/04/01/laidoff_oracle_workers/
[14] https://www.theregister.com/2026/03/25/oracles_apps_and_agents_push/
[15] https://whitepapers.theregister.com/
Advisors in Oracle negotiations said support levels are declining, while costs might increase as discounts disappear. Others have warned of a tougher approach to contract negotiations.
Oracle is aggressively expanding AI datacenter capacity to serve demand tied to customers and partners including OpenAI, xAI, Meta, Nvidia, and AMD. The deal for OpenAI alone is set to be worth about $300 billion over five years.
[1]
Widespread reports of [2]layoffs affecting thousands of staff came as [3]investor concerns grew over how Oracle would finance its AI datacenter build-out, while borrowing heavily to support the expansion.
[4]
[5]
In March, [6]Oracle increased the estimated cost of its fiscal 2026 restructuring plan by $500 million, taking the total to as much as $2.1 billion, as observers anticipated broader job cuts.
Oracle previously raised [7]$18 billion in debt and has since outlined plans to raise far more, as it funds datacenter investments aimed at meeting surging demand from AI model builders and enterprise customers. Ratings agency Moody’s warned of further borrowing and negative free cash flow as Oracle ramps up its AI infrastructure investment.
[8]
Nick Walter, CTO of professional consulting at commercial advisory firm House of Brick Technologies, said that there were plenty of anecdotal reports that Oracle support outcomes are getting worse, meaning slower service, less skilled help, and “more Oracle Support responses that were obviously written by AI.”
House of Brick had also seen a recent surge in customers asking for help in reducing Oracle Cloud Infrastructure (OCI) usage or help in negotiation with Oracle over long-term OCI deals, he said. “Many customers who adopted OCI in the last three to five years are suddenly finding out that their renewals are much more expensive because Oracle has eliminated or reduced enterprise discounts, and they are being forced close to public listed pay-as-you-go prices.”
Customers were also seeking help in response to pressure on Java, with audits and sales pushes and “scary-sounding threats.”
[9]
“This is not a new phenomenon but pressure continues and Java is the main front in Oracle's war against their customer's pocketbook,” he said.
Craig Guarente, founder and CEO of Palisade Compliance, said that Oracle was no longer simply putting pressure on customers to license Java; it was conducting official audits. “We've definitely seen in the last few months a return to classic Oracle auditing practices,” he said.
In 2023, Oracle changed its Java SE subscription model, shifting from a per-user or per-processor basis to per-employee. Critics called the move "predatory" as organizations that were using little Java but had a large number of employees could be hit hard by the cost increase. Later that year, research from Gartner showed that costs could be between two and five times greater under the new licensing model for using the same software.
Guarente also warned of price hikes at OCI contract renewal. “If you're not adequately protected, then we're getting 9 percent or 10 percent for long term lock in. It all goes back to that original purchase. You had some flexibility in there if you were thoughtful in how you negotiated those contracts. But if you signed the local standard agreement, there's no price protection.”
Eric Guyer, founding partner at Oracle and SAP advisory and consulting firm Remend, pointed out in [10]a social media post that the margins in software support were much higher than in datacenters.
[11]Oracle cuts jobs across sales, engineering, security
[12]DXC lands Metropolitan Police outsourcing deal that could climb to £1B
[13]'Uncle Larry's biggest fan' cut by email in early morning Oracle layoff spree
[14]Oracle: AI agents can reason, decide and act - liability question remains
“This means the value to Oracle of your software support payments is increasing, desperately so, whereas the value to you is diminishing, and at an increasing rate. I mean this both technically via waning innovation and the more than 8 percent annual inflationary adjustments,” he said.
Customers are also concerned about the long-term impact of the job losses on their relationship with Oracle, Guyer told The Register .
“The trend in license negotiations is only indirectly related to Oracle’s shift for now. The layoffs mean companies have lost one or more of their sales contacts. But for apps or the more strategic long-standing relationships, this means customers are wondering what this loss of institutional knowledge will mean for them. I’m not hearing customers wonder if Oracle is de-prioritizing its legacy software business just yet, although I see this as an obvious outcome,” he said.
The Register asked Oracle for comment and we'll update this article if we hear back. ®
Get our [15]Tech Resources
[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ad1nhlL8mRhzNef3MtCSHwAAAdQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[2] https://www.theregister.com/2026/03/31/oracle_cuts_jobs/
[3] https://www.theregister.com/2026/01/29/oracle_td_cowen_note/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ad1nhlL8mRhzNef3MtCSHwAAAdQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[6] https://www.theregister.com/2026/03/12/oracle_increases_restructuring_fund_for/
[7] https://www.theregister.com/2025/09/25/oracle_18_billion_debt/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ad1nhlL8mRhzNef3MtCSHwAAAdQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[10] https://www.linkedin.com/feed/update/urn:li:activity:7448165367295815681/
[11] https://www.theregister.com/2026/03/31/oracle_cuts_jobs/
[12] https://www.theregister.com/2026/04/08/dxc_met_police_contract/
[13] https://www.theregister.com/2026/04/01/laidoff_oracle_workers/
[14] https://www.theregister.com/2026/03/25/oracles_apps_and_agents_push/
[15] https://whitepapers.theregister.com/
So what exactly are the benefits of AI ?
JimmyPage
if you end up paying more for less ?
Re: So what exactly are the benefits of AI ?
VoiceOfTruth
Everyone, whether they use AI or Oracle or not, will be affected.
Bob the builder has a small company. He doesn't use Oracle. But he buys from a distributor who does. The distributor's will increase. Those costs will be passed on to Bob and Bob's mates.
Bill is a graphic designer. He doesn't use AI, he detests it and will never use it. But he rents an office somewhere, and the landlord uses AI for something. The landlord's tenants will be paying for that.
Ahh Oracle...
IGotOut
...one of the most at risk companies when the bubble pops.
Oh dear what a shame
Unfortunately it will impact the everyday workers the most , rather than the C-suite, but they are the ones getting screwed over already, so little change there.
Re: Ahh Oracle...
Like a badger
Depends on your definition of the "company". It's only investors and employees at risk. If Oracle went bust, somebody will buy all the assets and IP including software and brand, and a small core of tech people, purely to milk the locked-in customers.
Foretold
> Oracle job cuts and AI spending could impact support, raise prices
Not much of an Oracle, if they couldn't foresee their own future