Oracle Generates Generous Results in Generative AI Gold Rush

Early results suggest that Oracle may have already captured some of the sweetest prizes from the latest technology craze over Generative AI.

In its recent quarterly earnings announcement, Oracle CTO Larry Ellison states that a number of these Gen AI companies – more than 30 according to the press release – have committed to buying more than $2 billion of capacity in Oracle Cloud Infrastructure to help train their large language models.

Assuming at least 100 such Gen AI companies are going to be running OCI for the next three years – a typical contract length – for Cloud infrastructure services, that would amount to a cool $6.7 million per account per year, or at least half a million dollars every month. By comparison, Oracle is sending six-figure range invoices monthly to Twitter for its use of OCI, according to recent press reports. In other words, some of these well-financed Gen AI startups are already paying for massive capacity on OCI at the same trajectory as that of a Cloud pioneer like Twitter.

A new partnership with Cohere, a generative AI startup cited by Ellison, involves using OCI for building and training AI models, and delivering powerful and secure AI capabilities. Cohere models will be directly integrated into the industry’s most complete portfolio of business applications, including Oracle Fusion Cloud Applications, Oracle NetSuite, and Oracle industry-specific applications. In addition, Oracle has partnered with Cohere to enable OCI customers to add generative AI capabilities to their own applications through simple APIs with a new managed service featuring Cohere’s large language models.

Another key performance indicator of Oracle’s successes in the much-hyped Gen AI phenomenon is that Oracle has already been providing mission-critical back-office applications to help these Gen AI companies run their operations efficiently.

For example, well-financed Gen AI companies that have achieved more than $1 billion in valuation with the so-called unicorn status including Altair, Anthropic, Descript, Jasper, Lightricks, OpenAI, and Replit are all current users of Oracle NetSuite ERP, according to our Buyer Insight Master Database.

List of Gen AI start-ups running on Oracle Cloud Infrastructure (OCI)

Source: Apps Run The World, July 2023

Anthropic and OpenAI are noteworthy for their use of NetSuite ERP since 2019 as the former is closely tied to Google after raising nearly $1 billion in financing from investors including Google parent Alphabet, while Microsoft has invested $10 billion in the latter.

Across the three dozen of these unicorns being tracked by our database, NetSuite is the most favored ERP system, a track record that is consistent with the bigger population of technology services companies running Oracle applications for their mission-critical ERP financial management function.

Among the more than 6,800 professional services organizations – primarily those specializing in software and technology services – in the United States, Oracle has secured a 34% share of ERP use cases at these companies, according to our Buyer Insight Master Database.

Source: Apps Run The World, July 2023

Evan Goldberg, executive vice president and co-founder of Oracle NetSuite, has been vocal about NetSuite’s behind-the-scenes role in the making of many successful IPOs over the past few years. In 2021, almost two-thirds of tech IPOs ran on NetSuite. This Gen AI euphoria is no different as Oracle has continued to benefit handsomely by capitalizing on the high-octane growth rates of artificial intelligence startups, a pattern that has been playing out repeatedly since the early days of the Internet revolution in early 2000s.

At a time when few know exactly how to monetize Gen AI other than the common refrain of “Build It And They Will Come,’’ Oracle appears to have reaped early returns on one of the most exciting technology development cycles.

The parties that pocketed the most during the gold rush were the purveyors of tools and equipment and other supplies and the same scenario is manifesting in Gen AI with Oracle playing its strengths to the hilt because of an all-encompassing stack of products from Cloud infrastructure services to enterprise applications and its domain expertise from hardware to silicon that it acquired from Sun Microsystems.

In March 2023, Nvidia, the first trillion-dollar company created during the Gen AI gold rush, announced an expansion of its agreement with Oracle to run OCI for its Gen AI cloud services, citing OCI’s unique Supercluster capabilities for running high-performance Large Language Models.

What that entails is the fact the Oracle is sitting pretty just to supply the tools and shovels to help Gen AI companies train their LLMs and the associated Cloud workloads, along with the need to book, recognize and report their windfalls in order to better manage their complex business processes.

List of Oracle NetSuite ERP Customers

Source: Apps Run The World, July 2023

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