Oracle’s missteps in cloud computing are paying dividends in AI

Oracle missed the tech industry’s move to cloud computing last decade and ended up an also-ran. Nvidia selected Oracle to host its own cloud offering, which features Nvidia’s most advanced graphics processing units—the chips used to train AI models. xAI, one of Oracle’s biggest customers in the space, is building its own AI data center in Memphis to train the next generation of its Grok large language model, instead of using Oracle. Many of Oracle’s AI customers have been using its cloud to train their models—a process that involves ingesting massive amounts of data to construct the brains of the software. As its bigger competitors keep building more AI data centers, there may be less excess demand coming Oracle’s way, however.