Friday, May 17, 2024
HomeAIOracle boosts its generative AI capabilities as cloud competition heats up

Oracle boosts its generative AI capabilities as cloud competition heats up

Oracle, a cloud infrastructure provider in the US, is expanding its generative AI capabilities in response to increased competition and interest in AI among businesses.

The AI boom, spurred by the November 2022 debut of chatbot ChatGPT, is driving up demand for cloud computing services and data centers, since big amounts of data are necessary for AI model training, and the cloud gives access to massive datasets.

Oracle has been incorporating generative AI capabilities into its cloud architecture and applications to supplement the traditional AI already present.

“The classic AI is very good in terms of detecting patterns or predicting numbers… but you cannot use large language models to predict numbers,” Rondy Ng, executive vice president of applications development at Oracle, told CNBC.

“So we combined predictive numbering with the capacity to explain in words. As a result, the two work together to create a tremendous force that requires both. The number prediction component has been well-developed during the last several years. As part of the product, we continue to evolve it, and this will not end. “Generative AI is literally the talk of the town right now,” Ng stated.

Oracle said in March that further generative AI technologies would be integrated into finance, supply chain, human resources, sales, marketing, and customer service applications. Oracle stated that the generative AI capabilities may generate financial reports and design job advertisements, hence increasing productivity and lowering corporate costs.

This comes after the company revealed the use of generative AI throughout its technology stack in January.

“We believe Oracle’s AI approach is driving a renaissance of growth. [It is] ideally positioned to be a key beneficiary of the AI revolution,” said Dan Ives, managing director at Wedbush Securities, in an emailed statement to CNBC on Wednesday.

“The data Oracle sits on and the installed base gives Ellison & co. a major advantage to monetize the software layer of AI,” said Ives, referring to Larry Ellison, Oracle’s chairman and CTO.

As corporations hyped the generative AI story last year, technology providers must stay ahead of the curve, according to a Gartner report released on April 17. “They are bringing GenAI capabilities to existing products and services, as well as to use cases being identified by their enterprise clients.”


Oracle’s revenue and share price might rise if it captures a larger-thanexpected percentage of AI spending, according to the US investment bank. Oracle’s stock has up 23.74% in the last year, according to FactSet data.

“Generative AI services provide a significant advantage over our competitors. The competition must collaborate with a variety of firms and cloud providers to deliver that infrastructure and services. Ng told CNBC, “We actually take everything into an integrated stack and consume it.”

AI growth
Synergy Research Group ranks Oracle as the sixth-largest provider of cloud infrastructure services globally, trailing Amazon, Microsoft, and Google in market share.

While Oracle was late to adopt cloud infrastructure, the AI boom has raised demand for its AI technology. In 2018, Ellison characterized cloud computing as “complete gibberish.”

“Oracle followed the hyperscalers. [I believe] that is not a competitive concern for the remainder of 2024 and the foreseeable future. “We’re only at the beginning of this new generative AI journey,” said Ron Westfall, Futurum Group’s research director.

CEO Safra Catz stated in March that the company signed several “large new cloud infrastructure” contracts during the fiscal third quarter. Oracle reported that cloud sales increased 25% year over year to $5.1 billion.

“Interesting to us is management commentary suggesting its Oracle Cloud Infrastructure backlog is significant and AI isn’t yet really driving revenue, which is expected to be more meaningful in FY25,” analysts at Deutsche Bank wrote on Mar. 12.

In March, Ellison stated that Oracle’s Salt Lake City data facility will be able to accommodate eight Boeing 747 flights nose to tail.

Ellison described future market potential, stating that he expects more national and state government applications to be run on platforms such as Oracle Cloud Infrastructure, and that the company is negotiating sovereign regions with several governments.

“Another area [where Oracle] is ahead of the curve, although everybody’s jumping on it, is in terms of offering sovereign AI cloud – a cloud that operates exclusively within a country,” according to Westfall.

“More and more countries are going to say when it comes to gen AI, we want all that information, all that data stored within the country.”

In April, Oracle said that it would invest more than $8 billion in Japan over the next ten years to expand cloud computing and AI infrastructure.

Oracle and Nvidia established a partnership in March to supply sovereign AI solutions to customers worldwide.




RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments