The logo of the American multinational computer technology company Oracle was photographed at Mobile World Congress (MWC), the telecommunications industry's largest annual gathering, held in Barcelona on February 27, 2024. The world's largest mobile phone trade fair opens in Barcelona, and the industry is looking forward to the following: Artificial intelligence seeks to reverse sales decline. (Photo by Pau Barena/AFP) (Photo by Pau Barena/AFP via Getty Images)
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Oracle has been introducing generative AI capabilities to its cloud infrastructure and applications to complement the traditional AI already embedded.
“Classical AI is very good at detecting patterns and predicting numbers…but you can't use large language models to predict numbers,” says Oracle's Application Developer. Executive Vice President Rondy Ng told CNBC.
“So we combined the predictive numbering functionality with the verbal functionality. So the combination of the two is very powerful, and you need both. Over the past few years, the number prediction part has already been It's become very mature. Even though we continue to evolve it as part of the product, generative AI is basically a hot topic now,” Ng said.
In March, Oracle announced additional generative AI capabilities built across finance, supply chain, human resources, sales, marketing, and service applications. Oracle says its generative AI capabilities can perform tasks such as creating financial reports and creating job advertisements, increasing productivity and reducing business costs.
This comes after the company announced in January that it would implement generative AI across its technology stack.
“We believe Oracle is experiencing a resurgence of growth with its AI strategy. [It is] We are well positioned to be a major beneficiary of the AI revolution,” Dan Ives, managing director at Wedbush Securities, said in emailed comments to CNBC on Wednesday.
“Oracle's data and installed base gives Ellison a significant advantage in monetizing the software layer of AI,” Ives said, referring to Oracle Chairman and Chief Technology Officer Larry Ellison. ” he said.
While companies have been talking a lot about generative AI over the last year, technology providers need to stay ahead of the cycle, research firm Gartner said in an April 17 report. A use case has been identified by an enterprise client. ”
JPMorgan said generative AI and AI could drive increased IT spending and growth across the software industry. “Many software vendors, including Oracle, are citing benefits from continued investments in AI technology by enterprises,” JPMorgan analysts said in a March 12 note.
If Oracle captures a higher-than-expected share of spending on AI, it could boost revenue and have a positive impact on the stock, the US investment bank said. Oracle stock has soared 23.74% in the past 12 months, according to FactSet data.
“Generation AI service” [are] Basically, we have a huge advantage compared to our competitors. Competitors have to work with different companies and cloud providers for their infrastructure and their types of services. We're actually bringing everything into an integrated stack and leveraging that,” Ng told CNBC.
Oracle lags behind rivals such as Amazon, Microsoft and Google in market share for cloud infrastructure services, according to Synergy Research Group, which ranks Oracle as the world's sixth-largest service provider, along with IBM. Ranked as a provider.
Oracle has been slow to move into cloud infrastructure, but the AI boom has increased demand for its AI technology. In 2018, Ellison dismissed cloud computing as “complete nonsense.”
“Oracle followed the hyperscalers. [I think] That's not a competitive concern for, say, the rest of 2024 and the foreseeable future. We are at the very beginning of this entirely new generative AI journey,” said Ron Westfall, Research Director at Futurum Group.
CEO Safra Catz said in March that the company added several “large new cloud infrastructure” deals during the fiscal third quarter. Oracle said cloud revenue rose 25% year over year to $5.1 billion.
Deutsche Bank analysts said on March 12: “What's interesting to us is the significant backlog for Oracle Cloud Infrastructure and management's comments suggesting that AI is not yet really driving revenue. We expect this to become even more meaningful in FY25.”
Ellison said in March that the Salt Lake City data center Oracle is building could accommodate eight Boeing 747s from nose to tail.
Regarding future market opportunities, Ellison said he expects more national and state government applications to run on platforms like Oracle Cloud Infrastructure, adding that the company is negotiating with many countries for sovereign territory.
“Another area [where Oracle] “Everyone is jumping on it, but we're ahead of the curve in terms of offering a sovereign AI cloud, a cloud that only operates within the country,” Westfall said.
“When it comes to artificial intelligence, you're going to see more and more countries saying they want to keep all their information, all their data within their borders.”
In April, Oracle announced it would invest more than $8 billion in Japan over the next 10 years to grow cloud computing and AI infrastructure.
In March, Oracle and Nvidia announced they were partnering to provide sovereign AI solutions to customers around the world.
