Starting about a year or so ago, Larry Ellison said Oracle would differentiate itself from its hyperscaler competitors by building “hundreds” of data centers.
A few months later he boosted the stakes by promising that Oracle would build cloud data centers in every country in the world, and shortly thereafter cranked that target up to “every major city in the world.”
And now, as the AI Revolution accelerates dramatically and Oracle’s cloud business is surging, Ellison is proclaiming that Oracle is on its way to being able to give every Oracle customer its very own full-service cloud region by installing a complete but tiny Oracle Cloud data center within every customer’s data center.
But wait — I almost forgot — Oracle will be able to put these complete but ultra-compact cloud data centers on ships and submarines as well, according to Oracle’s visionary chairman and CTO.
I realize it’s tempting to immediately dismiss such ideas as impossible or impractical or goofy or silly or insincere fluffery. But when the person voicing those audacious dreams is the same person who’s built a legendary career on defying convention and pursuing the “impossible,” then the cynics among us might want to give Ellison’s grand AI vision a second and third thought.
After all, it was Ellison who decided a handful of years ago to jump into full competition in the cloud-infrastructure business against three of the world’s largest, wealthiest, and most-influential corporations the world has ever known: Microsoft, Google, and Amazon. And instead of being crushed by those highly capable, wildly successful, and deeply entrenched competitors, Oracle has grabbed significant share at the leading edge of the AI Revolution and has even convinced two of those near-invincible competitors — Microsoft and Google — to enter into breakthrough partnerships with Oracle to drive unprecedented value and innovation for shared customers.
And it was Ellison whose company last week reported that fiscal-Q4 RPO jumped 44% to $98 billion, and that in Q4 Oracle signed 30 AI deals valued at $12.5 billion. (For the full story on that, please see “Oracle Q4 Stunners: RPO Soars 44% to $98 Billion, Google Cloud Is New BFF.”)
Still want to dismiss where Ellison thinks the world of AI and cloud are headed?
On last week’s Q4 earnings call, Ellison was asked this question: “Can you talk about the innovation roadmap for OCI and your AI services in particular and why we should expect Oracle to keep on winning not just today but over the next several years to come in this market?” Here’s the core part of Ellison’s reply:
“We’ve talked for a while about our ability to build very small data centers, one you could put in a ship or a submarine or how a full Oracle Cloud we will soon have in six standard half-racks to go into a conventional data center so virtually any one of our customers could choose to have the full Oracle Cloud in their data center, with every service in the Cloud,” Ellison said.
But while small can be beautiful, Ellison also believes that Oracle is on its way to meeting a different set of market requirements for the AI Revolution by designing what he calls “the world’s largest AI data centers.”
“So we talk about the fact that we can start very small and that’s a huge difference between us and our competitors,” Ellison said. “What we haven’t talked so much about is we’re also building the largest data centers in the world…. We’re building a 70-megawatt data center where we can park eight Boeing 747s [each 232 feet long] nose-to-tail in this huge AI-training data center.”
Not content with a 70-megawatt that he said would be the world’s largest “AI data center,” Ellison tripled down on that vision by declaring that “We’re also building a 200-megawatt datacenter…. We’re now bringing 200-megawatt data centers online, so we are literally building the smallest, most portable, most affordable cloud data centers all the way up to 200-megawatt data centers.”
But the irrepressible Ellison was only getting warmed up.
“This AI race is going to go on for a long time. It’s not a matter of just simply getting ahead in AI, but you also have to keep your models current, and that’s going to take larger and larger data centers, and some of the data centers we have that we’re planning are actually even bigger. Some are getting very close to — dare I say it — a gigawatt, which is enough for a pretty good-sized city or for one enormous AI-training cloud data center,” Ellison said.
“No one else can span this range.”
Ask Cloud Wars AI Agent about this analysis
To reinforce his belief in Oracle’s ability to simultaneously scale way down and way up in the nascent Data Center Wars, Ellison later reiterated his belief that the day is coming when every Oracle customer — and there are now close to 500,000 of them — could have its own Oracle Cloud data center inside that customer’s own data center.
Replying to a question about Oracle’s market-leading range of deployment options, Ellison said, “Every medium-size on-premise customer that Oracle has could have a private full Oracle Cloud where they have no neighbors — they are the only user of that Oracle Cloud — and we could install that in their existing data center. Nobody else can do that.”
And to showcase the uniqueness of Oracle’s approach, Ellison came back to his earlier point about his company’s ability to deliver those services even for ocean-going vessels.
“We can put them on ships and on submarines — no one else can do it because we can start very very small. And all Oracle Clouds are identical except for scale — all Oracle Clouds have all Oracle services.”
While being a relative newcomer to the hyperscaler business certainly offered serious challenges — more than a few people said Ellison was crazy in going up directly against Microsoft, Google, and Amazon — but the contrarian-thinker Ellison said it also offered some advantages that he and Oracle are exploiting to the fullest.
“We have the advantage of seeing what all the other guys did, and we took a different road,” Ellison said.
“It took us a bit longer, but we think we’re better off in terms of security. We’re better off in terms of scalability, which means the ability to go down in size and up in size.
“And it allows us to get to every corner of the globe and provide a level of privacy for your data that other cloud providers cannot provide.”
Final Thought
Okay — for all of you who think Larry Ellison’s crazy, now’s the time to bet against him.
Who’s in?
The AI Ecosystem Q1 2024 Report compiles the innovations, funding, and products highlighted in AI Ecosystem Reports from the first quarter of 2024. Download now for perspectives on the companies, investments, innovations, and solutions shaping the future of AI.
