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Larry Ellison and Monica Seles and Bill Gates (back row) watch as Carlos Alcaraz of Spain plays 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 was a good year for Larry Ellison.
The Oracle co-founder has amassed an estimated $75 billion in paper wealth as the software company he founded in 1979 enjoyed its biggest stock gain since 1999. here and the dot-com boom.
While the S&P 500 rose 27% in 2024, Oracle shares jumped 63%, boosting Ellison’s net worth to more than $217 billion, according to Forbesonly from the back Tesla CEO Elon Musk and Amazon founder Jeff Bezos among the richest people in the world.
At 80, Ellison is a senior citizen in the tech industry, where his fellow billionaire founders tend to be decades younger. Meta CEO Mark Zuckerbergwhose net worth also exceeded $200 billion, is half his age.
But Ellison has found the fountain of youth both personally and professionally. 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, quickly mentioning that the night before he and his son had dined with his good friend Musk, who is advising President-elect Donald Trump (then the Republican nominee) while running Tesla and his other ventures.
Its big financial boon comes from Oracle, which tapped into the artificial intelligence craze with its cloud infrastructure technology and made its databases more accessible.
ChatGPT creator OpenAI said in June that it would use Oracle’s cloud infrastructure. Earlier this month, Oracle said it had also picked up business from Meta.
Startups that often choose a market leader Amazon Web services, when they choose cloud, also engage Oracle. Last year, video generation startup Genmo created an AI model training system Nvidia graphics processing units (GPUs) in the Oracle cloud, CEO Paras Jain said. Genmo now relies on Oracle’s cloud to create videos based on the prompts users enter on its website.
“Oracle has produced a product that’s different from what you can get elsewhere with GPU computing,” Jain said. The company offers “bare” computers that can sometimes provide better performance than architectures that use server virtualization, he said.
In his last income statement earlier this month, Oracle missed analysts’ estimates and issued a forecast that also fell short of Wall Street expectations. The stock had its worst day of 2024, falling nearly 7% and eating into gains for the year.
Still, Ellison was optimistic about the future.
“Oracle Cloud Infrastructure trains some of the world’s most important generative AI models because we’re faster and cheaper 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 about 10%, which would mark its second-strongest year of expansion since 2011. this way.
Jane said that when Genmo has challenges, it communicates with Oracle’s sales managers and engineers through a Slack channel. The collaboration has led to better reliability and performance, he said. He said Oracle is working with Genmo to ensure developers can run the Mochi open source video generator startup on Oracle’s cloud hardware with one click.
“Oracle was also more competitive on price than these large hyperscalers,” Jain said.
“This will be so easy”
Three months before its December earnings report, at an analyst event in Las Vegas, Oracle gave a rosy outlook for the next three years. Executive Vice President Doug Kering announced that the company will generate more than $66 billion in revenue in fiscal 2026. and over $104 billion in fiscal year 2029. The figures suggest an acceleration, with a total annual growth rate of more than 16%, compared to 9% in last quarter.
After Kering and CEO Safra Katz spoke, it was Ellison’s turn. The company’s chairman, chief technology officer and top shareholder appeared on stage in a black sweater and jeans, waved to analysts, licked his lips and sat down. For the next 74 minutes, he answered questions from seven analysts.
“Did … did he say $104 billion?” Ellison said, referring to Kering’s projection. Some of the crowd snickered. “This will be so easy. It’s a little crazy.”
Oracle’s revenue in fiscal 2023 was only $50 billion.
The new target impressed Eric Lynch, managing director of Scharf Investments, which held $167 million in Oracle stock at the end of September.
“For a company that’s been in the single digits for about a decade, that’s incredible,” Lynch said in an interview with CNBC.
Oracle co-founder and chairman Larry Ellison speaks during Oracle OpenWorld on October 22, 2018. in San Francisco, California.
Justin Sullivan | Getty Images
Oracle still lags behind in cloud infrastructure. In 2023 Amazon controls a 39% share of the market, followed by Microsoft with 23% and Google at 8.2%, according to industry researcher Gartner. That left Oracle up 1.4%.
But in database software, Oracle remains the undisputed leader. Gartner estimates that the company has a 17% market share in database management systems in 2023.
The challenge for Ellison is to find opportunities to expand.
Last year he visited Microsoft headquarters in Redmond, Washington, for the first time to announce a partnership that will allow organizations to use Oracle’s database through Microsoft’s Azure cloud. Microsoft is even installing Oracle hardware in its data centers.
In June, Oracle released a similar message with Google. Then, in September, Oracle finally partnered with Amazon, presenting its database on AWS.
Oracle and Amazon have been at loggerheads for years. AWS introduced a database called Aurora in 2014, and Amazon has been working hard to move away from Oracle. After a CNBC report of effort Ellison expressed doubt about Amazon’s ability to achieve its goal. But the project succeeded.
In 2019 Amazon published a blog post titled “Migration complete – Amazon’s consumer business just shut down its final Oracle database”.
A friendlier atmosphere
Ellison looked back on the history between the two companies at the analyst meeting in September.
“It struck me as kind of a cute comment about Amazon using Oracle, not using AWS, blah, blah,” he said. “And it hurt some people’s feelings. I probably shouldn’t have said that.’
He said a friend of his at a big bank in New York asked him to make sure the Oracle database was running on AWS.
“I said, ‘Great. It makes sense to me,” Ellison said.
The multi-cloud strategy should deliver gains in database market share, said Mizuho analyst Siti Panigrahi, who has the equivalent of a buy rating on Oracle shares. AI-related cloud deals will also help Oracle deliver on its promise of faster revenue growth, he said.
“Right now, Oracle has an end-to-end stack for enterprises to build their AI strategy,” said Panigrahi, who worked on applications at Oracle in the 2000s.
So far, Oracle has mainly made high-value AI deals with OpenAI and Musk’s X.ai. Of Oracle’s $97 billion in remaining performance obligations or revenue not yet recognized, 40 percent or 50 percent of that is related to GPU leasing, Panigrahi said.
Oracle did not respond to a request for comment.
Panigrahi predicts that a wider group of enterprises will begin to adopt AI, which will benefit Oracle given its hundreds of thousands of large customers.
There’s also promise in Oracle Health, the segment spun out of the company’s $28.2 billion acquisition of electronic health record software provider Cerner in 2022.
Yoshiki Hayashi, Marc Benioff and Larry Ellison attend USC’s Transformative Medicine: Rebels with a Cause Gala in Santa Monica, California on October 24, 2019.
Joshua Blanchard | Getty Images
Unlike rival Epic, Oracle Health lost market share in the US in 2023, according to estimates from KLAS Research. But Ellison’s relationship with Musk, who is set to lead Trump’s government efficiency department, could benefit Oracle Health “if there is a greater push to modernize existing health care systems,” Evercore analysts said in a note last week. They recommend buying stocks.
For now, Oracle is busy using AI to rewrite Cerner’s entire codebase, Ellison said at the analyst event.
“It’s another growth pillar,” he said. “I don’t think you’ve quite seen it yet.”
Hours earlier, Ellison called Marc Benioff, co-founder and CEO of the Salesforce. Benioff knows Ellison as well as anyone, having worked for him for 13 years before starting the cloud software company, which is now a major competitor.
“It was great,” Benioff said in a wide-ranging interview the next day about his conversation with Ellison.
Benioff talks about his former boss’ latest fortune.
“Larry really, really wants this,” Benioff said. “It’s very important to him that he’s building a great company, what he believes is one of the most important companies in the world, and also wealth is very important to him.”
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