Oracle's free Fusion agent studio points customers to a metered cloud bill
Oracle's cloud applications revenue grew 10% last quarter, while its infrastructure line grew 121%. The new HR agents run on the faster line, and the industry studio is planned within 12 months.
Oracle says AI agents will soon run human resources and whole industries. One of the two products is still only a plan.
Oracle published two releases this week, one for HR and one for industries. A footnote in the industry release says that studio is "planned to be available within the next 12 months", in the United States first.
Oracle gives away the agent builder because the money is in the infrastructure the agents run on. Oracle's March release says its AI Agent Studio for Fusion, its suite of cloud business applications, is "available at no additional cost". The Industry studio release describes a no code and low code environment for retail, finance, utilities and other sectors, with no price stated.
Oracle's own table shows where growth is coming from. Its first quarter results give five quarters of revenue for cloud applications (software rented by subscription) and cloud infrastructure (rented computing power). Applications grew between 10% and 13% year on year in every quarter. Infrastructure growth climbed from 55% to 121%.
The dollar gains are lopsided. Infrastructure revenue rose about $4.0 billion in a year, to $7.4 billion. Applications rose about $380 million, to $4.2 billion.
Infrastructure added roughly $10.60 for every dollar that applications added. Applications were 53% of cloud revenue a year ago and are 36% now.
Total cloud revenue was $11.6 billion in the quarter, up 62%. Most of that growth came from infrastructure, the line the HR agents run on, rather than the applications line they are bundled with.
Applications alone cannot repay a build of this size. Oracle spent $28.5 billion on capital expenditure, meaning data centres and equipment, in the quarter. The spending is about 6.8 times the quarter's entire applications revenue.
Oracle is also raising money from shareholders. It sold $20 billion of common stock through an at the market programme, which sells shares gradually on the open market. Free cash flow, the cash left after capital spending, was negative $5.4 billion.
Customers are funding part of the gap in advance. Operating cash flow was $23.1 billion. Of that, $11.4 billion was customer prepayments, which Oracle's table flags as carrying a significant financing component.
Contracted work still to be delivered stands at $664 billion, up $209 billion in a year. Those contracts are for capacity, and customers have already prepaid part of it.
Oracle's guidance says infrastructure must carry the load. For the second quarter it forecasts cloud revenue growth of 64% to 70% in constant currency, meaning with exchange rate effects removed. For the full year it targets revenue of at least $90 billion.
An applications line whose quarterly revenue rose only $380 million in a year cannot get there. Agents that run on Oracle Cloud Infrastructure (OCI) are one more source of demand.
Oracle's pages tell customers to watch a usage unit. The industry release says users can monitor "AI-unit consumption". The product page says teams can "track AI unit consumption to understand usage as adoption grows".
That unit is tied to Oracle's infrastructure. In the industry studio, models come from "Oracle Cloud Infrastructure (OCI) Enterprise AI". The HR release says its new applications are "running on Oracle Cloud Infrastructure".
Building an agent is free for Fusion customers. Running one draws on hosted models, and Oracle tells customers to track AI unit consumption. That unit is Oracle's meter, priced at one cent.
Oracle does publish a price for the unit. In a May post on its customer community, Oracle says "One AI Unit costs one cent" and offers an estimator for modelling consumption. The industry studio's product page offers a multitenant cloud service, one shared by many customers, to eligible industry customers and partners. It points them to their account team.
The HR launch shows what Oracle wants agents to do for its applications business. Oracle Fusion Claw is described as a governed runtime, the software that runs the agents, which lets them research, compute, simulate and plan again. Seven new applications sit inside Fusion Human Capital Management, including Workforce Orchestration, Recruiting Command Center and Payroll Command Center.
Those agents prepare work and route recommendations "for review and approval". The release adds that employers "retain responsibility for employment decisions". That is a pitch for governed execution inside a system customers already pay for. It gives Oracle a retention argument against Workday and SAP.
Oracle may also be defending its applications business. A business growing 10% is exposed to rivals, and free agents help keep customers.
Defence alone would not justify $28.5 billion of capital spending in a quarter. The agents also run on OCI, so even the retention story ends in infrastructure usage.
Pricing matters before the first production workflow. A committed block of units with a ceiling would give a customer a budget line, at the cost of freedom to scale. KPMG and PwC are both quoted in Oracle's industry release. A fixed-fee pilot scoped without a unit budget would leave the integrator carrying any usage charge.
Oracle reports its fiscal second quarter in December. Applications growing at the same 10% would put that line near $4.29 billion, built on last year's $3.9 billion for the quarter. That line has stayed in a band of 10% to 13% growth for five straight quarters, so staying inside it is the baseline.
Oracle guides total cloud revenue to grow 65% to 71% in dollars. If applications reach $4.29 billion, that implies infrastructure of about $8.9 billion to $9.4 billion, up roughly 117% to 129%. Infrastructure above that range while applications stay at 10% would suggest that agents are feeding the meter rather than the applications line.