Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Larry Ellison, Monica Seles and Bill Gates (back row) watch Carlos Alcaraz of Spain play against Alexander Zverev of Germany in their quarterfinal match during the BNP Paribas Open in Indian Wells, California, on March 14, 2024.
Clive Brunskill | fake images
It has been a good year for Larry Ellison.
oracle The co-founder has earned roughly $75 billion in paper wealth as the software company he founded in 1979 enjoyed its biggest stock rally since 1999 and the dot-com boom.
While the S&P 500 index gained 27% in 2024, Oracle shares soared 63%, raising Ellison’s net worth to more than $217 billion, according to Forbesonly behind tesla executive director Elon Musk and Amazon founder jeff bezos among the richest people in the world.
At 80, Ellison is an old man in the tech industry, where his fellow billionaire founders are generally decades younger. Goal executive director Mark Zuckerbergwhose net worth has also surpassed $200 billion, is half his age.
But Ellison has found the fountain of youth on both a personal and professional level. After divorcing several times, Ellison was reported this month to have a relationship with a 33-year-old woman. And at a meeting with analysts in Las Vegas in September, Ellison was as engaged as ever, casually mentioning that the night before, he and his son were having dinner with his good friend Musk, who was advising President-elect Donald Trump (then the Republican). . nominee) while running tesla and his other companies.
Its big financial boost came from Oracle, which rode its way into the artificial intelligence craze with its cloud infrastructure technology and has made its databases more accessible.
ChatGPT creator OpenAI said in June that it will use Oracle’s cloud infrastructure. Earlier this month, Oracle saying had also captured business from Goal.
Startups, which often choose to be market leaders Amazon Web services when choosing a cloud has also involved Oracle. Last year, video generation startup Genmo installed a system to train an AI model with NVIDIA graphics processing units (GPUs) in Oracle’s cloud, said CEO Paras Jain. Genmo now relies on the Oracle cloud to produce videos based on prompts that users type on its website.
“Oracle produced a different product than you can get elsewhere with GPU computing,” Jain said. The company offers “bare metal” computers that can sometimes offer better performance than architectures that employ server virtualization, he said.
in your latest earnings report Earlier this month, Oracle missed analyst estimates and issued a forecast that was also weaker than Wall Street expected. The stock had its worst day of 2024, falling nearly 7% and denting gains for the year.
Still, Ellison was optimistic about the future.
“Oracle Cloud Infrastructure trains several of the world’s leading generative AI models because we are faster and less expensive than other clouds,” Ellison said in the earnings release.
For the current fiscal year, which ends in May, Oracle is expected to post revenue growth of around 10%, which would mark its second-strongest year of expansion since 2011.
Jain said that when Genmo has challenges, it communicates with Oracle engineers and sales executives through a Slack channel. The collaboration has resulted in improved reliability and performance, he said. He said Oracle worked with Genmo to ensure developers could launch the startup’s open source Mochi video generator on Oracle cloud hardware with a single click.
“Oracle was also more competitive on price than these large hyperscalers,” Jain said.
‘That’s going to be very easy’
Three months before its December earnings report, at an analyst event in Las Vegas, Oracle had offered an optimistic outlook for the next three years. Executive Vice President Doug Kehring stated that the company would produce more than $66 billion in revenue in fiscal 2026, and more than $104 billion in fiscal 2029. The figures suggested an acceleration, with a compound annual growth rate of more than 16%, compared to 9% in fiscal 2029. last quarter.
After Kehring and CEO Safra Catz spoke, it was Ellison’s turn. The company’s president, chief technology officer, and largest shareholder walked onto the stage in a black sweater and jeans, greeted the analysts, licked their lips, and sat down. Over the next 74 minutes, he answered questions from seven analysts.
“Did he… did he say $104 billion?” Ellison said, referring to Kehring’s projection. Some in the crowd laughed. “That’s going to be very easy. It’s kind of crazy.”
Oracle’s fiscal 2023 revenue was just shy of $50 billion.
The new target impressed Eric Lynch, CEO of Scharf Investments, which owned $167 million in Oracle shares at the end of September.
“For a company in the single digits for about a decade, that’s incredible,” Lynch told CNBC in an interview.
Oracle Co-Founder and Chairman Larry Ellison delivers a keynote speech during Oracle OpenWorld on October 22, 2018 in San Francisco, California.
Justin Sullivan | fake images
Oracle is still far behind in cloud infrastructure. In 2023, Amazon controlled 39% of the market share, followed by Microsoft with 23% and Google to 8.2%, according to industry researcher Gartner. That left Oracle with 1.4%.
But in database software, Oracle remains a stalwart. Gartner estimated that the company would have a 17% market share in database management systems in 2023.
Ellison’s challenge is finding opportunities for expansion.
Last year, he visited Microsoft headquarters in Redmond Washington, to announce for the first time a partnership that would allow organizations to use Oracle’s database through Microsoft’s Azure cloud. Microsoft even installed Oracle hardware in its data centers.
In June, Oracle launched a similar ad with Google. Then in September, Oracle finally partnered with Amazon. presenting your database on AWS.
Oracle and Amazon had traded barbs for years. AWS introduced a database called Aurora in 2014 and Amazon worked hard to get away from Oracle. Following a CNBC Report in the effort, Ellison expressed doubts on Amazon’s ability to achieve its goal. But the project was successful.
In 2019, Amazon published a blog post titled “Migration Complete: Amazon’s Consumer Business Just Deactivated Its Final Oracle Database.”
friendlier environment
Ellison reviewed the history between the two companies at the September analyst meeting.
“I got a little cute commenting that Amazon uses Oracle, it doesn’t use AWS, blah blah,” he said. “And that hurt some people’s feelings. I probably shouldn’t have said that.”
He said a friend at a major New York bank had asked him to make sure the Oracle database ran on AWS.
“I said, ‘Great. It makes sense to me,'” Ellison said.
The multi-cloud strategy should drive gains in database market share, said analyst Siti Panigrahi of Mizuho, who has the equivalent of a buy rating on Oracle stock. AI-related cloud deals will also help Oracle deliver on its promise of faster revenue growth, he said.
“Oracle now has an end-to-end stack for companies to build their AI strategy,” said Panigrahi, who worked on applications at Oracle in the 2000s.
So far, Oracle has mostly been closing high-value AI deals with companies like OpenAI and Musk’s X.ai. Of Oracle’s $97 billion in remaining performance obligations, or revenue that has not yet been recognized, 40% to 50% is tied to GPU leasing, Panigrahi said.
Oracle did not respond to a request for comment.
Panigrahi predicts that a broader sector of companies will begin to adopt AI, which will be a boon for Oracle given its hundreds of thousands of large customers.
There’s also promise in Oracle Health, the segment that emerged from the company’s $28.2 billion acquisition of electronic health records software provider Cerner in 2022.
Yoshiki Hayashi, Marc Benioff and Larry Ellison attend the USC Transformative Medicine Gala: Rebels with a Cause in Santa Monica, California on October 24, 2019.
Joshua Blanchard | fake images
Unlike rival Epic, Oracle Health lost US market share in 2023, according to estimates KLAS Research. But Ellison’s connection to Musk, who will co-lead Trump’s Department of Government Efficiency, could benefit Oracle Health “if there is greater momentum toward modernizing existing health systems,” Evercore analysts said in a note last week. . They recommend buying shares.
For now, Oracle is busy using AI to rewrite Cerner’s entire code base, Ellison said at the analyst event.
“This is another pillar for growth,” he said. “I guess you haven’t seen it yet.”
Hours earlier, Ellison had called Marc Benioff, co-founder and CEO of sales force. Benioff knows Ellison better than anyone, having worked for him for 13 years before founding the cloud software company that is now a major competitor.
“It was incredible,” Benioff said in a wide-ranging interview the next day of his talk with Ellison.
Benioff talked about his former boss’s latest run of fortune.
“Larry really wants this,” Benioff said. “This is very important to him, who is building a great company, which he believes is one of the most important companies in the world, and also, wealth is very important to him.”
LOOK: Oracle and C3.ai boomed in their earnings reports, says Jim Cramer
