Looking at the secret and prospects of Oracle’s success in the AI industry

Oracle, an American software company, is emerging as the hottest company in the tech industry these days.

Once treated as an obsolete company, the company seems to be in its second heyday based on increased demand for artificial intelligence (AI). In the middle of this month, Oracle shares have almost tripled in the past six months, with the stock price recording its largest daily increase in 33 years.

As earnings and stock prices rose together, the Wall Street Journal (WSJ) called Oracle “NVIDIA in the cloud industry.” Industry sources even said Oracle should be included in the Magnificent 7 (M7), which refers to seven key technology stocks instead of Apple or Tesla.

Is Oracle’s run a bubble brought about by the AI craze or a prelude to explosive growth.

This week’s The Tech Wave deals with Oracle’s secrets and prospects for a turnaround.

사진 확대 Oracle CI. Oracle and Maekyung DB

① Data powerhouse Oracle turns to AI

사진 확대 U.S. President Donald Trump holds a press conference in the Roosevelt Room of the White House on January 21 (local time) and speaks about the project to establish a new artificial intelligence (AI) company “Stargate,” which will invest up to $500 billion (about 718 trillion won). Softbank Chairman Son Jeong-ui, Oracle founder and chief technology officer Larry Ellison, and OpenAI CEO Sam Altman (from the second left) are watching. AP Yonhap News Agency

Founded in 1977 by Larry Ellison and others, Oracle was originally focused on database (DB) and enterprise resource management (ERP) markets.

Although it was in its heyday with its unique monopoly strategy, it faced a crisis as the cloud market rose rapidly in the 2010s.

While Oracle’s cloud transition was delayed, competitors such as Amazon Web Service (AWS), Microsoft Azure, and Google Cloud Platform (GCP) came up and gave up market pie rapidly.

However, Oracle, which is a latecomer in the cloud market, is writing a reversal scenario as the AI era opens in earnest. The database (DBMS), which Oracle has accumulated for nearly 50 years, has become a powerful weapon.

Here, DBMS refers to a system that stores and manages data.

Oracle is the first company in the world to launch a commercial database service. Oracle maintains a firm world No. 1 position in this field. It has major financial companies, telecommunications companies, and manufacturers around the world as customers for decades.

Oracle’s DB management system maintains an unrivaled level in large-scale transactions and security, and in particular, the cost of change is extremely high, so the “lock-in effect” is very large. Everything from Software as a Service (SaaS) to ERP customers is woven into Oracle’s ecosystem.

Analysts say that the establishment of an “all-in-one full stack” structure that encompasses infrastructure, DB, ERP, AI, and SaaS is the only competitiveness of Oracle compared to competitors Microsoft (MS) and AWS.

It has evolved into almost the only company that encompasses AI cloud infrastructure (GPU, servers, storage, network, security, and databases).

For example, in Oracle service, when analyzing data with AI, it is possible inside the database without moving internal data to an external AI system. This leads to an overwhelming advantage in terms of speed and performance, as well as security and management when combining AI with the data that companies have. This is why Oracle is a realistic alternative for large companies seeking to transition to AI.

Another strength was that competitors built infrastructure optimized for GPUs (graphical processing devices) for AI training and execution when they grew their CPU-oriented cloud business. Oracle has maintained a close relationship with Nvidia for a long time, and the effect is in full swing.

Kim Sung-ha, president of Oracle Korea, told a reporter last year, “Oracle is working quickly with Nvidia on cloud platforms and GPUs.”

In fact, the application of Nvidia’s latest AI GPU, Blackwell ‘GB200’, is considered a competitive advantage for Oracle Cloud Service (OCI).

② ‘Open’ Multi-Cloud Strategy Effect

사진 확대 Cloud-related images. Maekyung DB

Oracle has taken a strategy to open its database services to free use even as it competes fiercely with MS, AWS, and Google for cloud market hegemony.

He intentionally chose a ‘multi-cloud’ strategy. Core data for AI and data analysis are operated by Oracle databases and other services are operated by third-party cloud services.

For example, Oracle database Atogle Cloud, which was officially launched in September last year, supports Google Cloud’s Vertex AI (Vertex AI) and Gemini Emini foundation models. Customers who use this can operate both companies’ clouds like a single cloud and analyze data.

This led to the effect of using Oracle databases even for AWS, Google (Cloud), and MS (Azer) customers, and sales soared.

Oracle said revenue from its multi-cloud database, which is offered through collaboration with Amazon, Google and MS, rose 1529% year-over-year in the first quarter.

Larry Ellison, Oracle Chairman and CTO, said, “We expect to continue to grow significantly every quarter over the next few years, and we plan to provide 37 additional data centers to the three hyperscaler partners to expand the total to 71.” Oracle added, “This will allow customers to utilize Oracle databases and AI functions no matter what cloud environment they use.”

Oracle will unveil the Oracle AI database at the ‘Oracle AI World’ held in October.

The service enables customers to use their data directly from Oracle databases to combine it with various large language models (LLMs) such as Google Gemini, OpenAI ChatGPT, and xAI Grok.

③ AI innovation comes from partnerships

“If it helps to innovate, even if it’s the enemy, hold hands.”

This is the key to Oracle’s fast pursuit, which was a latecomer.

It is no exaggeration to say that Oracle’s allies are all key players in the AI ecosystem, including Nvidia, OpenAI, Meta, and Arm, as well as Google, AWS, and MS.

Oracle is participating as a key infrastructure partner in the “Stargate Project,” a $500 billion (about 700 trillion won) mega-AI infrastructure construction plan announced shortly after President Trump took office.

The Stargate project is a large-scale project aimed at building supercomputers and data centers in the U.S. by joining hands with global technology and investment companies such as Oracle, Softbank, Microsoft, Nvidia, and Arm, centering on OpenAI.

Big Tech’s partnership expansion is also interpreted as meaning that it will grow and share the endless pies that AI will bring, not monopolize. Amid the acceleration of AI development, joint venture seems to be actively underway as the need for supplier diversification grows among big tech companies.

Oracle and Google Cloud expanded their cooperation by providing Google’s latest AI model, Gemini 2.5, through Oracle Cloud Infrastructure (OCI) Generative AI service.

Oracle plans to expand its options so that it can use video, image, voice and music generation models, as well as industry-specific models (MedLM) in the Oracle ecosystem (OCI) through integration with Vertex AI (Vertex AI) of Google Cloud.

It also joined hands with Elon Musk’s xAI. xAI announced that it will work with Oracle to deliver its latest Grok model through Oracle Cloud Infrastructure (OCI) live Generative AI service.

사진 확대 OpenAI and Oracle are building a data center in Texas. OpenAI

What stands out most is cooperation with OpenAI.

Oracle and OpenAI have signed a 300 billion dollar cloud computing contract. It is the largest transaction ever in the AI industry and will take place over five years from 2027.

Oracle is building its first data center for OpenAI in Abilene, Texas. Oracle has introduced OpenAI’s latest model, GPT-5, throughout its database and SaaS applications.

In addition, Oracle announced the promotion of AI projects in the United Arab Emirates (UAE) and new cloud cooperation with IBM. It has also been reported that Oracle is pursuing a large-scale cloud computing contract with Meta a week after the contract with OpenAI was disclosed.

According to foreign media such as Reuters and Bloomberg News, Oracle is reportedly set to sign a $20 billion (about 28 trillion won) contract to supply computing power for training Meta and artificial intelligence (AI) models.

사진 확대 Oracle Chairman Larry Ellison (left) and Tesla blue-collar Elon Musk. Photo = Yonhap News

Invisible political cooperation and calculation are also factors that cannot be overlooked.

Chairman Alison is known to be close to President Trump. He even hosts a donation meeting for Trump’s re-election campaign at his mansion. This is also why Oracle is drawing attention as a key company that will support the Trump administration’s rise in AI.

Analysts say it is different from Elon Musk, another big tech mogul, in that he has consistently maintained a good relationship with Trump. With Oracle’s stock price soaring recently, Chairman Larry Allison is expected to compete with Musk for the world’s richest position for the time being.

Chairman Larry Ellison also appeared alongside OpenAI CEO Sam Altman and Softbank Group Chairman Son Jeong-ui at President Donald Trump’s announcement of “Stargate,” a $500 billion artificial intelligence (AI) infrastructure investment project, in January.

Meanwhile, whether TikTok’s U.S. business rights will fall into Oracle’s hands is also drawing public attention. According to Bloomberg News and others, Oracle Consortium, which includes Oracle, is seeking to acquire TikTok’s U.S. division.

Earlier in 2020, President Trump issued an executive order to his parent company ByteDance to sell its business division in the United States by the 20th, citing the possibility of personal information leakage by TikTok users. At this time, it was suggested that Oracle would take over some of its shares as a technology partner. Oracle is providing TikTok’s cloud infrastructure in the U.S.

④ After all, companies say in numbers, huge RPOs

Oracle said its revenue rose 11% year-on-year to $14.93 billion in the June-August period (the first quarter of fiscal 2026).

Cloud (IaaS+SaaS) revenue increased 28% to $7.2 billion and cloud infrastructure (IaaS) in particular grew 55% to $3.3 billion, driving overall growth.

It is the enormous residual performance obligation (RPO) that has received greater market attention than the improved performance.

Oracle said that among the contracted sales, the “remaining performance obligation” that has not yet been fulfilled amounted to $455 billion (about 633.2235 trillion won), up 359% from a year ago.

When asked about the rapid increase in remaining performance obligations (RPOs), he said, “Oracle has signed a total of four billions of dollars worth of contracts with three customers, greatly expanding its RPO,” and stressed, “As additional large contracts are expected to be signed in the next few months, RPO is likely to exceed $500 billion.”

Based on this RPO growth, Oracle Cloud Infrastructure (OCI)’s revenue for fiscal year 2026 is expected to increase by 77% year-on-year to reach $18 billion. In addition, the company predicted that sales could expand to $32 billion, $73 billion, $114 billion and $144 billion over the next four years.

While the industry is surprised by the astronomical RPO, there are also skeptical views. The RPO multi-year contract is only a kind of promise, and there is still a risk that the contract will be canceled. From an investor’s point of view, it is important to note that stock prices may fluctuate for the time being.

Oracle, who has been waiting for the time, seems confident. In preparation for the fact that other big tech companies such as Google and MS do not accurately disclose AI sales, Oracle expressed confidence by specifically presenting the actual contract amount and forecast in this performance announcement.

Wall Street and other investment industries said Oracle’s performance showed solid demand for AI infrastructure. As long as the AI craze or bubble persists, the general prediction is that Oracle’s run will continue for the time being.

However, there is also skepticism about whether such growth can continue in the long run.

The AI craze is leading to overheating investment and a burden on valuation. Will Oracle be able to open the second act of a new tech empire.

Newsroom September 26 12:03

U.S. President Donald Trump signed an executive order Thursday approving a proposal that would preserve TikTok in the US, in a transaction that, according to Vice President J.D. Vance, values the business at $14 billion.

The deal meets the requirements of the National Security Act, which requires Chinese ByteDance to sell TikTok’s US operations or face a ban on operating in the country.

Under the terms, which China has yet to approve, a new joint venture will oversee TikTok’s US operations, with ByteDance retaining a stake of less than 20%.

Tech giant Oracle, Silver Lake, and Abu Dhabi-based investment fund MGX will be the main investors in TikTok’s US operations, controlling about 45% of the company’s shares, while ByteDance’s investors and new shareholders will own 35%, CNBC reported.

No ByteDance representative was present at the signing, and the company has not confirmed that the transaction is taking place. No purchase price was reported, and there is no indication that the Chinese government has made any changes to the laws that would be necessary for the transaction to take place.

However, Trump said the Chinese President gave the green light for the transaction. Vance, for his part, said the Chinese government showed some resistance before the deal.

Under the planned deal, Oracle will oversee the app’s security operations and continue to provide cloud computing services for the new US company TikTok. Trump said Oracle CEO Larry Ellison is part of the ownership group and that his company “plays a very important role.”

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Shares of the database software company have soared more than 80 per cent in 2025, as scorching demand for AI computing turbocharges its revenue growth.

– For anyone concerned that artificial intelligence is fuelling a bubble in technology stocks, Oracle has entered the conversation.

Shares of the database software company have soared more than 80 per cent in 2025, the seventh best performance in the S&P 500 Index, as scorching demand for AI computing turbocharges its revenue growth.

The latest leg of the rally came after Oracle projected revenue in its cloud computing business will jump 700 per cent in the next three fiscal years, sending the stock up 36 per cent on Sept 10.

Oracle also has been linked to the Trump administration’s negotiations to keep TikTok operating in the United States.

The company has served as TikTok’s primary cloud infrastructure provider for years.

On Sept 17, the White House extended the deadline for its ban of the Chinese video sharing app until Dec 16 while talks continue.

Oracle shares edged lower on Sept 17, falling 1.9 per cent after two consecutive days of gains.

The stock is now trading around the highest price-to-estimated earnings since the dot.com era at 43 times, making Oracle more expensive than eight of the nine most valuable companies in the S&P 500.

Nvidia, for example, trades at 31 times profits projected over the next 12 months and is expected to have much faster sales growth over that period.

“Investors viewed Oracle as a boring low growth company, and all of a sudden it’s an AI winner,” said director of research at Fulton Breakefield Broenniman Michael Bailey. “But you’ve got a lot of risk. You’re buying the stock now based on hope that we’re going to see massive growth in year four, five and six.”

The long-term nature of Oracle’s anticipated expansion, with the heaviest growth coming several years from now, is a major reason why its stock looks so expensive, as analysts have not adjusted their earnings expectations for the current fiscal year and next.

But looking at profits estimated over the next three years, Oracle’s multiple is a more manageable 25 times – although that is still almost twice the average over the past decade.

“This year is irrelevant, next year is irrelevant, the year after that is more important,” Mr Bailey said. “If you go out a few years, there’s going to be this massive spike in growth. You’ve got to value that today.”

Of course, plenty of investors are comfortable taking a longer-term view with growth stocks.

Two of the most popular examples – Tesla and Palantir Technologies – are priced at more than 180 times earnings projected over the next 12 months, compared with 27 times for the Nasdaq 100.

Even over a three-year horizon, Tesla and Palantir are still very expensive at around 100 times.

But those companies are outliers. Nvidia, perhaps the most popular AI stock that has faced its own valuation scrutiny, is priced at 24 times earnings over the next three years, which is less than Oracle even though its profits are booming right now.

Oracle’s overall sales are projected to rise 17 per cent in the current fiscal year, followed by 22 per cent in 2027 and 42 per cent in 2028, according to the average of analyst estimates compiled by Bloomberg.

Nvidia’s revenue is expected to rise 58 per cent in 2025, followed by 33 per cent and 17 per cent in the next two years.

“The multiple bakes in a very high likelihood that everything Oracle announced comes to fruition,” said Fort Pitt Capital Group chief investment officer Dan Eye. “I’d put us in the camp of being a bit more sceptical.”

Of course, there are inherent risks in relying on expectations for the next 12 months, much less three years.

This is especially true when it comes to AI, which is not a proven moneymaker for most companies beyond providers of cloud computing services and infrastructure.

“The issue isn’t Oracle not getting the business, it’s the end customer – will they get the benefit out of it as fast as the market assumes?” said Value Point Capital principal Sameer Bhasin. “Back in the dot.com era, every time somebody put fibre in the ground, the stock would go up, but they didn’t realise the end customer IRR was negative,” he said, referring to the internal rate of return.

So far, Oracle’s valuation has not spooked Wall Street, where more than 70 per cent of analysts recommend buying the stock.

Of the 47 tracked by Bloomberg, there are 13 hold ratings and no sells. BLOOMBERG

TikTok’s U.S. operations would be acquired by a consortium that includes Oracle Corp., Andreessen Horowitz and private equity firm Silver Lake Management LLC under a deal that President Trump is set to discuss with Chinese President Xi Jinping this week.

The framework agreement, unveiled on Monday by senior US and Chinese officials after two days of talks in Madrid, would create a U.S.-based version of the popular social media app. Oracle, venture capital firm Andreessen and Silver Lake would all hold stakes in the new venture, according to people familiar with the matter.

If finalized, a deal would resolve a sticking point in Beijing-Washington relations and help shape the fate of China’s most valuable private company — a $400-billion startup whose video product gained some 170 million mostly young American users before getting labeled a threat to national security.

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Under an initial agreement, ByteDance Ltd.’s stake in TikTok would fall below 20% to satisfy a 2024 U.S. law that required the Beijing-based company to divest or face a ban in the American market. Once finalized, the app’s users would migrate to a new platform, a person familiar with the contours of the deal said.

TikTok’s U.S. engineers have been testing that app, which would replicate the recommendation algorithms that made the platform so popular in the first place, the person said. As part of the framework agreement, ByteDance would license the technology behind that, a Beijing official has said.

On the U.S. end, the deal calls for Oracle to continue providing cloud services for TikTok, a business that has become a steady source of revenue for the Austin-based company. Oracle already works with TikTok to host user data in the U.S. and other countries as part of a multibillion-dollar partnership TikTok has dubbed Project Texas.

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But many other unknowns persist — not least the price tag attached to one of ByteDance’s most lucrative businesses. The U.S. operations have been valued at about $35 billion to $40 billion, though tech valuations have climbed rapidly with the advent of the artificial intelligence boom.

It’s also unclear how much each prospective investor would acquire under the deal. Oracle, for instance, plans to take a small stake in the new venture, according to one of the people.

The U.S. company’s shares rose as much as 5.9% in New York on Tuesday, before giving up most of those gains. The stock is up 84% so far this year thanks to its ascendant cloud infrastructure business.

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A senior White House official said that any details of the framework agreement should be regarded as speculation unless announced by the administration. Representatives for TikTok, Oracle, Andreessen and Silver Lake didn’t respond to requests for comment.

More than a year in the making, a final deal would allow TikTok to remain operating for U.S. users — though it deprives ByteDance of control of a key overseas asset, at a time it seeks users and traffic to drive broader endeavors in AI and commerce.

The law signed last year by then-President Biden stipulates that ByteDance cannot have any operational role, including with the algorithm, once a sale is completed.

Under the agreement, new outside investors would own 50% of TikTok’s U.S. business in a unit that would be spun off from ByteDance. Its existing U.S. investors would own about 30% of the new business, cutting the Chinese firm’s stake to just below 20% and allowing it to meet the ownership requirements of the U.S. security law.

The plan largely tracks with a proposal that had come close to an agreement with ByteDance earlier this year but was derailed when China withheld its approval following Trump’s decision in April to impose sweeping tariffs on the world’s second-largest economy.

TikTok’s future became entangled in the broader negotiations between Washington and Beijing over trade. Had there been no agreement on TikTok, any in-person meeting between Trump and Xi later this year would have been off the table, according to a U.S. official.

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On Tuesday, Trump told reporters he had “a deal on TikTok” with the Chinese as he departed the White House for a state visit to the U.K., but declined to name the companies involved. “I’m going to speak to President Xi on Friday to confirm everything up,” he said. “We made a very good trade deal, and I hope good for both countries.”

Specific terms of the agreement, and whether it would satisfy the requirements of the national security law, remain unclear. But the will to challenge Trump legally or politically over his approach to TikTok has waned. The president has credited the app with boosting his popularity among younger voters and sealing his comeback election win in November.

To buy time for the transaction to be completed, Trump postponed the deadline for ByteDance to divest TikTok’s U.S. operations. Under the extension announced Tuesday — the fourth granted since January — the company has until Dec. 16 to forge a deal before a nationwide ban sets in.

Trump granted the reprieve even though the 2024 law allows for only one 90-day extension. That posture has defied bipartisan consensus behind the divest-or-ban provision — and has raised questions about whether the president’s repeated extensions have been legally sound.

Tuesday’s extension means TikTok can continue operating in the U.S. while the administration takes more time to strike an accord with ByteDance on a “qualified divestiture” to a non-Chinese owner. Partners such as Apple Inc. and Alphabet Inc.’s Google can also continue hosting the popular video app in their online stores.

Treasury Secretary Scott Bessent said in an interview with CNBC that the deal was similar to the commercial terms that had been negotiated earlier in the year and indicated that he believed Trump and Xi would finalize the accord this week.

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“This deal wouldn’t be done without proper safeguards for U.S. national security,” Bessent said. “It seems as though we were also able to meet the Chinese interest.”

Ford and Wagner write for Bloomberg. Bloomberg writers Zheping Huang, Meghashyam Mali, Josh Wingrove, Hadriana Lowenkron, Alexandra S. Levine, Edwin Chan and Mark Anderson contributed to this report.

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TikTok’s US operations are to be acquired by a US consortium.

– TikTok’s US operations would be acquired by an investor consortium that includes Oracle, Andreessen Horowitz and private equity firm Silver Lake Management under a framework deal that US President Donald Trump is set to discuss with Chinese President Xi Jinping later this week.

The tentative agreement, unveiled on Sept 15 by senior US and Chinese officials after two days of talks in Madrid, would create a US-based version of the popular social media app, with Oracle, Andreessen and Silver Lake all holding stakes in the new venture, according to people familiar with the matter.

Under the deal, ByteDance’s stake in TikTok would be reduced to below 20 per cent to satisfy a US national security law passed in 2024 that required the Beijing-based company to divest or face a ban of the app in the US market.

If completed, with the blessing of Mr Trump and Mr Xi, the transaction would allow the video sharing platform to keep operating in the US and remove a sticking point in US-China relations.

The deal calls for Oracle to continue providing cloud services for TikTok in the US, a business that has become a steady source of revenue for the Austin-based company.

Oracle already works with TikTok to host user data in the US and other countries as part of a multibillion-dollar partnership that TikTok has dubbed Project Texas.

Oracle shares rose as much as 5.9 per cent in New York on Sept 16, before giving up most of those gains. The stock is up 84 per cent so far this year thanks to its ascendant cloud infrastructure business.

It is unclear how much each prospective investor would acquire under the deal.

Oracle, for instance, plans to take a small stake in the new venture, according to one of the people.

A senior White House official said that any details of the framework agreement should be regarded as speculation unless announced by the administration. Representatives for TikTok, Oracle, Andreessen and Silver Lake did not respond to requests for comment.

The fate of TikTok’s lucrative recommendation software – which steers videos to users based on their viewing preferences – remains unclear.

A Chinese official said after the talks that ByteDance would license its algorithm to the American operation, while the US side declined to offer details.

The law signed in 2024 by then President Joe Biden stipulates that ByteDance cannot have any operational role, including with the algorithm, once a sale is completed.

Under the agreement, new outside investors would own 50 per cent of TikTok’s US business in a unit that would be spun off from ByteDance.

ByteDance’s existing US investors would own about 30 per cent of the new business, cutting the Chinese firm’s stake to just below 20 per cent and allowing it to meet the ownership requirements of the US security law .

The plan largely tracks with a proposal that had come close to an agreement with ByteDance earlier in 2025 but was derailed when China withheld its approval following Mr Trump’s decision in April to impose sweeping tariffs on the world’s second-largest economy.

TikTok’s future became entangled in the broader negotiations between Washington and Beijing over trade.

Had there been no agreement on TikTok, any in-person meeting between Mr Trump and Mr Xi later in 2025 would have been off the table, according to a US official.

On Sept 16, Mr Trump told reporters he had “a deal on TikTok” with the Chinese as he departed the White House for a state visit to Britain, but declined to name the companies involved.

“I’m going to speak to President Xi on Friday to confirm everything up,” he said. “We made a very good trade deal, and I hope good for both countries.”

Specific terms of the agreement, and whether it would satisfy the requirements of the national security law, remain unclear.

But the will to challenge Mr Trump legally or politically over his approach to TikTok has waned.

The President has credited the app with boosting his popularity among younger voters and sealing his comeback election win in November.

To buy time for the transaction to be completed, Mr Trump postponed the deadline for ByteDance to divest TikTok’s US operations.

Under the extension announced on Sept 16 – the fourth granted since January – the company has until Dec 16 to forge a deal before a nationwide ban sets in.

Mr Trump granted the reprieve even though the 2024 law allows for only one 90-day extension.

That posture has defied bipartisan consensus behind the divest-or-ban provision – and has raised questions about whether the President’s repeated extensions have been legally sound.

Sept 16’s extension means TikTok can continue operating in the US while the administration takes more time to strike an accord with ByteDance on a “qualified divestiture” to a non-Chinese owner.

Partners like Apple and Alphabet’s Google can also continue hosting the popular video app in their online stores. BLOOMBERG