Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Larry Ellison, Monica Seles and Bill Gates (back row) watch as Spain’s Carlos Alcaraz takes on Germany’s Alexander Zverev in their quarter-final 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.
Oracle co-founder earned an estimated $75 billion on paper as the software company he founded in 1979 experienced its biggest stock rally since 1999 and the dot-com boom.
While the S&P 500 is up 27% in 2024, Oracle shares are up 63%, bringing Ellison’s net worth to more than $217 billion. Forbesonly behind Tesla General director Elon Musk and Amazon the 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 are typically decades younger. Meta General director Mark Zuckerbergwhose net worth also exceeded $200 billion, twice his age.
But Allison has found the fountain of youth both personally and professionally. After several divorces, Alison was reported to communicate with a 33-year-old woman this month. And at a meeting with analysts in Las Vegas in September, Ellison was as engaged as ever, directly mentioning that the night before he and his son had dinner with his good friend Musk, who is advising President-elect Donald Trump (then the Republican nominee) during running Tesla and his other businesses.
His biggest financial gain came from Oracle, which tapped into the artificial intelligence craze with 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 he also took business from Meta.
Startups that often choose the market leader Amazon Web services have also tapped Oracle when choosing the cloud. Last year, video startup Genmo created a system to train an artificial intelligence model Nvidia graphics processing units (GPUs) in the Oracle cloud, CEO Paras Jain said. Genmo now relies on Oracle’s cloud to generate videos based on the prompts users enter on its site.
“Oracle has come out with a different product than what you can get anywhere with GPU computing,” Jain said. According to him, the company offers “bare metal” computers that can sometimes provide better performance than architectures that use server virtualization.
In his own latest income statement earlier this month, Oracle missed analysts’ estimates and issued a forecast that was also weaker than Wall Street expected. The stock had its worst day of 2024, falling nearly 7% and eating up gains for the year.
Still, Ellison was bullish on 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 an earnings release.
Oracle is expected to post revenue growth of about 10% in the current fiscal year, which ends in May, marking its second-highest year of expansion since 2011.
Jain said that when Genmo has problems, he communicates with sales executives and Oracle engineers through a Slack channel. The collaboration has led to improved reliability and productivity, he said. He said Oracle is working with Genmo to make sure developers can run the startup’s Mochi open-source video generator on Oracle’s cloud hardware with a single click.
“Oracle was also more competitive on price than those big hyperscalars,” Jain said.
“It’ll be that easy”
Three months before its December earnings report, at an analyst event in Las Vegas, Oracle gave a bleak forecast for the next three years. Executive Vice President Doug Kering said the company will generate more than $66 billion in revenue in fiscal 2026, and over $104 billion in fiscal year 2029. The numbers suggest an acceleration, with a compound annual growth rate of more than 16%, compared to 9% in the last quarter.
After a conversation between Kering and CEO Safra Katz, it was Alison’s turn. The company’s chairman, chief technology officer and major shareholder took the 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 forecast. Some in the crowd giggled. “It’s going to be so easy. It’s kind of crazy.”
Oracle’s revenue in fiscal 2023 was just over $50 billion.
The new target impressed Eric Lynch, managing director of Scharf Investments, who owned $167 million in Oracle stock at the end of September.
“For a company that’s been in the single digits for a decade or so, that’s incredible,” Lynch told CNBC.
Oracle co-founder and chairman Larry Ellison delivers a keynote address during Oracle OpenWorld on October 22, 2018. in San Francisco, California.
Justin Sullivan | Getty Images
Oracle is still a big laggard in cloud infrastructure. In 2023, Amazon controlled 39% of the market share, followed by Microsoft with 23% and Google by 8.2%, according to industry researcher Gartner. That left Oracle up 1.4%.
But in database software, Oracle remains the leader. According to Gartner estimates, in 2023 the company had a 17% market share of database management systems.
Allison’s job is to find opportunities to expand.
Last year he visited the headquarters of Microsoft in Redmond, Washington, announcing for the first time a partnership that will enable organizations to use Oracle Database through Microsoft’s Azure cloud. Microsoft has even installed Oracle hardware in its data centers.
In June, Oracle released a similar ad from Google. Then, in September, Oracle finally partnered with Amazon, presenting your database on AWS.
Oracle and Amazon have traded features for years. AWS introduced a database called Aurora in 2014, and Amazon has worked hard to move away from Oracle. After a CNBC report on effort Allison expressed doubt about Amazon’s ability to achieve its goal. But the project was successful.
In 2019, Amazon published a blog post titled “Migration Complete – Amazon’s Consumer Business Just Decommissioned Its Latest Oracle Database”.
More friendly atmosphere
Ellison looked back on the history between the two companies at an analyst meeting in September.
“I’ve become comfortable commenting that Amazon uses Oracle, doesn’t use AWS, blah blah,” he said. “And it hurt some people’s feelings. I probably shouldn’t have said that.”
He said a friend at a major New York bank asked him to verify that an Oracle database was running on AWS.
“I said, ‘Great.’ It makes sense to me,” Ellison said.
The multi-cloud strategy should provide an increase in database market share, said Mizuho analyst Siti Panigrahi, who has an equivalent buy rating on Oracle shares. The AI-related cloud deals will also help Oracle deliver on its promise of faster revenue growth, he said.
“Oracle now has an end-to-end stack for enterprises to build their AI strategy,” said Panigrahi, who worked on applications at Oracle in the 2000s.
Until now, Oracle has mostly made high-value AI deals with companies like OpenAI and Musk’s X.ai. According to Panigrahi, of the $97 billion in remaining liabilities or revenue that Oracle has yet to recognize, 40% or 50% are related to GPU leasing.
Oracle did not respond to a request for comment.
Panigrahi predicts that a wider range of enterprises will begin to adopt artificial intelligence, which will be an advantage for Oracle, given its hundreds of thousands of large customers.
Also promising is Oracle Health, a segment created by the company’s $28.2 billion 2022 acquisition of electronic health record software provider Cerner.
Yoshiki Hayashi, Marc Benioff and Larry Ellison at the Transformative Medicine of USC: Rebels with a Cause Gala 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 The KLAS study. But Ellison’s connection to Musk, who will co-head Trump’s Department of Government Efficiency, could benefit Oracle Health “as there is a greater push to modernize existing health care systems,” Evercore analysts said in a note last week. They recommend buying shares.
At the moment, Oracle is busy using artificial intelligence to rewrite Cerner’s entire codebase, Ellison said at an analyst event.
“This is another pillar of growth,” he said. “I guess you haven’t seen it yet.”
A few hours earlier, Ellison called Marc Benioff, co-founder and CEO Salesforce. Benioff knows Ellison just as well, having worked for him for 13 years before founding 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 chat with Ellison.
Benioff talked about his former boss’s latest fortune.
“Larry wants it very badly,” Benioff said. “It’s very important to him that he’s building a great company that he thinks is one of the most important companies in the world, and wealth is very important to him.”
WATCH: As Jim Cramer says, Oracle and C3.ai came out hot in their earnings reports
