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 | Getty Images
It's been a good year for Larry Ellison.
oracle The co-founder gained nearly $75 billion in paper wealth as the software company he started in 1979 enjoyed the biggest stock rally since the 1999 dot-com boom.
While the S&P 500 rose 27% in 2024, Oracle shares rose 63%, raising Ellison's net worth to more than $217 billion, according to ForbesJust behind Tesla CEO Elon Musk and Amazon founder Jeff Bezos Among the richest people in the world.
Ellison, 80, is a senior citizen of the tech industry, where his fellow billionaire founders are generally decades younger. dead CEO Mark Zuckerbergwhose net worth has also swelled to over $200 billion, half his age.
But Ellison found the fountain of youth both personally and professionally. After divorce several times, Ellison was I mentioned This month to engage with a 33 year old woman. At a meeting with analysts in Las Vegas in September, Ellison was as engaged as ever, mentioning offhandedly that the night before, he and his son had had dinner with his good friend Musk, who advises President-elect Donald Trump (then a Republican). . filter) during operation Tesla And his other projects.
Its big financial boon came from Oracle, which binged the AI craze with its cloud infrastructure technology and made its databases more accessible.
OpenAI, the creator of ChatGPT, said in June that it would use Oracle's cloud infrastructure. Earlier this month, Oracle He said I've also gotten works from dead.
Startups, which often choose the market leader Amazon Web Services When choosing the cloud, Oracle was also involved. Last year, video production startup Genmo created a system to train an AI model Nvidia graphics processing units (GPUs) in the Oracle Cloud, CEO Paras Jain said. Genmo now relies on the Oracle cloud to produce videos based on prompts users type on its website.
“Oracle has produced a different product than you can get anywhere else with GPU computing,” Jain said. He said the company offers “bare metal” computers that can sometimes produce better performance than architectures that use server virtualization.
In it Latest earnings report Earlier this month, Oracle fell short of analyst estimates and issued a forecast that was also weaker than Wall Street had expected. The stock had its worst day of 2024, falling nearly 7% and eating into the year's gains.
However, Ellison was optimistic about the future.
“Oracle Cloud Infrastructure trains many of the world's most important 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 record revenue growth of about 10%, representing its second-strongest year of expansion since 2011.
Jain said that when Genmo faces challenges, it communicates with Oracle sales managers and engineers through a Slack channel. He said the collaboration led to improved reliability and performance. He said Oracle worked with Genmo to ensure developers could launch the startup's Mochi open source video generator on Oracle cloud devices with one click.
“Oracle was also more competitive on price than these larger scale metrics,” Jain said.
“That would be so easy”
Three months before its December earnings report, at an analyst event in Las Vegas, Oracle gave a rosy forecast for the next three years. Executive Vice President Doug Kering announced that the company will produce revenues of more than $66 billion in fiscal year 2026, and More than $104 billion In fiscal year 2029. The numbers indicate accelerating growth, with a compound annual growth rate of more than 16%, compared to 9% in fiscal year 2029. last quarter.
After Kering and CEO Safra Catz spoke, it was Ellison's turn. The company's chairman, technology chief and largest shareholder walked on stage wearing a black jacket and jeans, waved to analysts, licked his 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 Kering's forecast. Some in the crowd laughed. “That would be so easy. It's kind of crazy.”
Oracle's revenue in fiscal 2023 was just under $50 billion.
The new target impressed Eric Lynch, managing director of Scharf Investments, which owned $167 million in Oracle shares at the end of September.
“For a company that's been operating in the single digits for a decade or so, 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 | Getty Images
Oracle is still far behind in cloud infrastructure. In 2023, Amazon controlled 39% of the market share, followed by Microsoft with 23%. Google By 8.2%, according to industry researcher Gartner. This left Oracle up 1.4%.
But in database software, Oracle remains a strong company. Gartner estimates that the company will have a 17% market share in database management systems in 2023.
The challenge for Ellison is to find opportunities for expansion.
Last year, it is Visited Microsoft headquarters in Redmond, Washington, for the first time to announce a partnership that will enable organizations to use Oracle Database through the Microsoft Azure cloud. Microsoft has even installed Oracle hardware in its data centers.
In June, Oracle A Similar ad With Google. Then, in September, Oracle finally partnered with Amazon, Introduction to its database On OS.
Oracle and Amazon have traded barbs for years. AWS introduced a database called Aurora in 2014, and Amazon has worked hard to distance itself from Oracle. Follow a CNBC report On the effort, Ellison expressed doubt About Amazon's ability to reach its goal. But the project succeeded.
In 2019, Amazon published a Blog post It's titled “Migration Complete – Amazon's Consumer Business Just Deprecated Its Final Oracle Database.”
A more friendly atmosphere
Ellison looked back at the history between the two companies at an analyst meeting in September.
“I kind of had a nice comment about Amazon using Oracle, and not using AWS, blah, blah,” he said. “And that hurts some people's feelings. Maybe I shouldn't have said that.”
He said a friend at a major New York bank asked him to make sure the Oracle database ran on AWS.
“I said, 'Great. This makes sense to me,'” Ellison said.
The multi-cloud strategy should deliver gains in database market share, said analyst Siti Panigrahi of Mizuho, which has a buy rating equivalent to Oracle shares. AI-related cloud deals will also help Oracle deliver on its promise of faster revenue growth, he said.
“Oracle now has an integrated suite for enterprises to build their AI strategy,” said Panigrahi, who worked on applications at Oracle in the 2000s.
So far, Oracle has mainly struck high-value AI deals with the likes of OpenAI and Musk's X.ai. Of Oracle's remaining $97 billion in performance obligations, or revenue yet to be recognized, 40% or 50% of it is tied to GPU leasing, Panigrahi said.
Oracle did not respond to a request for comment.
Panigrahi expects that a wide range of organizations will start adopting AI, which will be a boon for Oracle given its hundreds of thousands of large customers.
There's also promise in Oracle Health, a sector that resulted from the company's $28.2 billion acquisition of electronic health records software vendor Cerner in 2022.
Yoshiki Hayashi, Marc Benioff and Larry Ellison attend the USC Transformational Medicine Gala: Rebels with a Cause in Santa Monica, California, on October 24, 2019.
Joshua Blanchard | Getty Images
Unlike rival Epic, Oracle Health lost US market share in 2023, according to estimates Class Research. But Ellison's relationship with Musk, who is set to co-lead the Trump administration's government efficiency lead, could benefit Oracle Health “if there is a greater push toward modernizing existing health care systems,” analysts at Evercore said in a note last week. They recommend buying stocks.
Ellison said at the analyst event that Oracle is currently busy using artificial intelligence to rewrite Cerner's entire code base.
“This is another pillar of growth,” he said. “I guess you haven't seen it yet.”
Hours earlier, Ellison had a phone call with Marc Benioff, co-founder and CEO Sales force. Benioff knows Ellison as well as anyone, having worked with him for 13 years before starting the cloud software company that is now a major competitor.
“It was great,” Benioff said in a wide-ranging interview the next day regarding his conversation with Ellison.
Benioff spoke about his former boss's latest fortune.
“Larry wants this so bad,” Benioff said. “This is very important to him, that he 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.”
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