- The next Oracle Data Center may need the energy of temporary gas generators
- West Texas Data Center could connect online before it connects to the grid
- Oracle recently added several important clients for their cloud services
A new Bloomberg The research on Oracle’s operations has revealed how the company has gone from a pioneer of the database to an important cloud service provider during the last decade, an unlikely transition when the then CEO Larry Ellison (now CTO) called for the cloud computing “Giberish complete” in 2008.
However, today, Oracle is responsible for promoting XAI in Utah and building GPU groups for Nvidia in Singapore, Japan and Indonesia, not to mention its joint effort with OpenAi Worth 5+GW of computer power.
Then, in 2022, Tiktok became an important client for Oracle. Now surrounding all US traffic through Oracle, Tiktok generates about $ 1 billion in revenues for Oracle every year.
Future Data Center Future de Oracle
However, all this has had a cost, and Oracle now needs to add more data center capacity to keep up with demand. The company has already pledged to spend tens of billions in Mega sites despite the obstacles of the supply chain, but Openai’s demand for the Stargate project has added even more pressure.
As a result, its ‘Frontier’ campus of western Texas may need temporary gas energy until the network connections arrive. It is expected to have a capacity of 1.4GW, Oracle could cost more than $ 1 billion annually to energy using gas generators (according to Bloomberg, citing people familiar with the plans).
This comes at a time when Oracle faces financial struggles, even despite growth. For the first time since 1990, Oracle recently published its first negative cash flow due to an increase in expenses.
“Oracle is going through a business model transformation,” said Bernstein Mark Moerdler analyst. “We believe that the margin will recover and the cash flow will be substantial once they exceed this investment phase.”
Speaking about fiscal year 2025, CEO Safra Catz said that Oracle expects higher cloud infrastructure growth rates and total cloud growth rates this year despite a strong increase last year.
“Oracle is on the way to being not only the world’s largest cloud application company, but also one of the world’s world’s largest cloud infrastructure companies,” Catz added.
