Larry Ellison has never been one to settle for the norm, so even as Oracle CEO Safra Catz was disclosing some of the most remarkable financial results the business world has ever seen, Ellison was laying out his vision for how Oracle expects its future AI adventures to dwarf what it achieved in Q1.
Let me set the context: on Oracle’s Q1 earnings call earlier this week, Catz described the company’s breathtaking RPO performance in Q1 — up 359% to $455 billion — and revealed that her Oracle Cloud Infrastructure (OCI) business would scale at an astonishing pace over the next five years:
- FY26: $18 billion, up 77%
- FY27: $32 billion, up 44%
- FY28: $73 billion, up 128%
- FY29: $114 billion, up 56%
- FY30: $144 billion, up 26%.
Bear in mind that’s just the infrastructure side of Oracle’s cloud business — it doesn’t include the company’s cloud apps business, which currently has an annualized run rate of more than $15 billion.
But as truly sensational as those numbers are, Ellison made it clear that he believes Oracle’s cloud and AI business is just getting started as he spoke of Oracle’s powerful position in AI training and AI inferencing, both of which he said are “multi-trillion-dollar” markets.
And to win these markets of tomorrow, Ellison said, Oracle must in some way return to its roots —data and databases — to help customers extract the remarkable full potential of the AI Revolution.
To share that vision, I’ve decided that the best approach is to let Ellison himself relate what’s about to unfold in his own words because he, perhaps more than any other single executive, has become the grand architect behind the AI Revolution that’s about to turn our world upside-down.
“Eventually, AI will change everything,” Ellison said in his prepared remarks on the earnings call.
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“Right now, AI is fundamentally transforming Oracle and the rest of the computer industry, though not everyone fully grasps the extent of the tsunami that is approaching.
“Look at our quarterly numbers: some things are undeniably evident. Several world-class AI companies have chosen Oracle to build large-scale GPU-centric data centers to train their AI models. That’s because Oracle builds gigawatt-scale data centers that are faster and more cost-efficient at training AI models than anyone else in the world.”
So is “AI training” the “tsunami” that’s approaching? Ellison’s narrative so far had me leaning in that direction, but he then got even more ambitious with his outlook.
“Training AI models is a gigantic multi-trillion-dollar market. It’s hard to conceive of a technology market as large as that one. But if you look closely, you can find one that’s even larger: it’s the market for AI inferencing. Millions of customers are using those AI models to run businesses and governments.”
And then Ellison dropped the other (very large) shoe by describing how AI training will not be nearly as large as a related market.
“In fact, the AI inferencing market will be much, much larger than the AI training market. AI inferencing will be used to run robotic factories, robotic cars, robotic greenhouses, biomolecular simulations for drug design, interpreting medical diagnostic images and laboratory results, automating laboratories, placing bets in financial markets, automating legal processes, automating financial processes, and automating sales processes,” Ellison said.
A moment later, he revealed the real magic behind AI, and it is AI inferencing.
“It’s AI inferencing that will change everything,” Ellison said, which is why “Oracle is aggressively pursuing both AI training and AI inferencing.
“AI is going to write — that is, generate — the computer programs called AI agents that will automate your sales and marketing processes. Let me repeat that. AI is going to automatically write the computer programs that will then automate your sales processes and your legal processes and everything else, and your factories, and so on.”
And Ellison is bullish on Oracle’s chances to take the lead in this brand-new market because of the core asset and technology it’s been focused on for the past half-century: data and databases.
“We think we’re in a pretty good position to be a winner in the inferencing market because Oracle is by far the world’s largest custodian of high-value private enterprise data. With the introduction of our new AI database, we added a very important new way for you to store your data in our database: you can vectorize it. By vectorizing it, by vectorizing all your data, all your data can be understood by AI models.
“And we’ve made it very easy for our customers to directly connect all their databases, all their new Oracle AI Databases, and cloud storage, OCI cloud storage, to the world’s most advanced AI reasoning models: ChatGPT, Gemini, Grok, Llama, all of which are uniquely available in the Oracle Cloud.
“After you vectorize your data and link it to the LLM of your choice, you can then ask any question you can think of — for example, ‘How will the latest tariffs impact next quarter’s revenue and profit?’ The large language model will then apply advanced reasoning to the combination of your private enterprise data plus publicly available data, and you get answers to important questions without ever compromising the safety and security of your private data.”
And that’s how Oracle will use its 50 years of data and database expertise to leapfrog the competition in AI, Ellison said.
“Who is offering something like that to customers? We will be the first when we deliver it and demonstrate it at AI World next month. That’s what our customers have been asking for ever since the introduction of ChatGPT 3.5 almost three years ago: ‘I want to ask questions about anything. Therefore, you need to understand my enterprise data as well as all the publicly available data. You can answer the questions that are most important to me.’ Well, now they can ask those questions.”
Final Thought
So AI training is a multi-trillion-dollar market, and Oracle’s deeply into it. But AI inferencing will be an even bigger market than AI training, and Oracle’s racing into that business as well with the unique advantage of its long and illustrious history in data management.
Of course, we’re still in the very early innings, and any market with a scale approaching $1 trillion will surely attract lots and lots of competition. But as of now, Oracle’s got to be seen as the favorite for a variety of reasons, with these two being the biggest: its 50 years of database leadership, and Larry Ellison’s technological vision and leadership.
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