Oracle’s AI Infrastructure Business Booms, Promising More Growth Ahead
In a recent quarterly earnings call, Oracle’s top executives, Safra Catz and Larry Ellison, highlighted the significant growth and potential of the company’s generative artificial intelligence (GenAI) infrastructure. Catz revealed that Oracle has secured at least 40 new AI bookings worth over a billion dollars that have yet to come online, indicating a strong pipeline of future revenue.
Ellison emphasized Oracle’s commitment to bringing GenAI technology to a wide range of industries, citing examples such as a digital assistant for ambulatory clinic systems and the alignment of Albania’s laws with the European Union’s regulations. He expressed confidence in Oracle’s Gen 2 AI infrastructure business, stating that it has become evident to everyone.
The executives also discussed Oracle’s expansion plans, including the construction of new cloud data centers to meet the growing demand for cloud services. Ellison revealed that Oracle is working on a massive data center in the U.S. that can accommodate eight Boeing 747s nose to tail, highlighting the scale of the company’s infrastructure investments.
Additionally, Catz outlined Oracle’s capital expenditure plans for fiscal year 2025, which include $10 billion for expanding existing data centers and building new ones. She reassured analysts that Oracle is well-prepared to handle any constraints, such as graphics processing unit (GPU) shortages, thanks to strategic partnerships with companies like Nvidia.
Overall, Oracle reported strong financial results for the quarter, with total revenue reaching $13.3 billion, up 7 percent year over year. Cloud services and license support revenues saw significant growth, while infrastructure-as-a-service (IaaS) revenue increased by 49 percent year over year. The company’s total cloud revenue reached $5.1 billion, up 24 percent year over year.
Looking ahead, Catz provided guidance for the fourth fiscal quarter, expecting continued growth in total revenue and cloud revenue. With a strong performance in the AI infrastructure business and a robust pipeline of new bookings, Oracle is well-positioned for further success in the rapidly evolving tech landscape.