How Oracle plays cheaply in AI

When it comes to big techs, Oracle is hardly small-fry. Oracle was named as both an equity investor and “key initial technology partner" for the project, and founder and Chairman Larry Ellison joined OpenAI’s Sam Altman and SoftBank Chief Executive Masayoshi Son Tuesday at the White House for the announcement. Oracle has already ratcheted up its capital expenditures on AI significantly, with annual total capex now nearing $11 billion annually compared with an average of $5.5 billion over the last four fiscal years. Still, while Oracle’s $500 billion market cap makes it the largest tech company on the S&P 500 not valued above $1 trillion, it still has to compete with bigger players with much more spending power. In a report last month, Moerdler noted that “the smaller footprints enables Oracle to more closely match their capex with customer’s consumption and thus revenue, as they can expand as customers need it."