The 47-year-old company that made its name on relational database software has emerged as an attractive cloud-computing provider for AI developers such as OpenAI, sending its long-stagnant stock to new heights.
Oracle shares are up 34% since January, well outpacing the Nasdaq’s 14% rise and those of bigger competitors Microsoft, Amazon.com and Google.
It is a surprising revitalization for a company many in the tech industry had dismissed as a dinosaur of a bygone, precloud era. Oracle appears to be successfully making a case to investors that it has become a strong fourth-place player in a cloud market surging thanks to AI.
Its lateness to the game may have played to its advantage, as a number of its 162 data centers were built in recent years and are designed for the development of AI models, known as training.
In addition, Oracle isn’t developing its own large AI models that compete with potential clients.
The company is considered such a neutral and unthreatening player that it now has partnerships with Microsoft, Google and Amazon, all of which let Oracle’s databases run in their clouds. Microsoft is also running its Bing AI chatbot on Oracle’s servers.
Other big clients include xAI and Nvidia. Oracle co-founder and Chief Technology Officer Larry Ellison’s tight relationship with their respective chief executives, Elon Musk and Jensen Huang, helped seal those deals.
The company touted the benefits of a burgeoning AI business in its earnings Monday, posting cloud-infrastructure revenue that was up 45% from the same quarter last year. Its results beat expectations and, coupled with robust guidance, sent the stock up 9% in after-hours trading.
Ellison said on the call that building giant data centers is “something that Oracle has proven to be very good at. It’s the reason we’re doing so well in the AI training business.”
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