Larry Ellison is having a banner year as Oracle earns the most since the dot-com boom

it was a good year for Larry Ellison.

Oracle’s co-founded the software company he started in 1979 as it enjoyed its biggest stock rally since 1999 and the dot-com boom, amassing nearly $75 billion in paper wealth.

While the S&P 500 is up 27% in 2024, Oracle shares are up 63%, pushing Ellison’s net worth to over $217 billion. Forbesjust behind Tesla CEO Elon Musk and Amazon the founder Jeff Bezos among the richest people in the world.

At 80, Ellison is a senior citizen in the tech industry, where his fellow billionaire founders are generally decades younger. Meta CEO Mark Zuckerberghis wealth has exceeded 200 billion dollars, he is half his age.

But Ellison has found a fountain of youth, both personally and professionally. After several divorces, it became Ellison informed He will be engaged to a 33-year-old woman this month. At a September meeting with analysts in Las Vegas, Ellison was as engaged as ever, noting in advance that he and his son had dinner the day before with his good friend Musk, an adviser to President-elect Donald Trump (then a Republican). candidate) while working Tesla and his other ventures.

His big financial boon came from Oracle, which maneuvered into an artificial intelligence craze with cloud infrastructure technology and made databases more accessible.

ChatGPT creator OpenAI announced in June that it would use Oracle’s cloud infrastructure. Earlier this month, Oracle he said he also took work from him Meta.

Startups often choose the market leader Amazon Web Services also deals with Oracle when choosing a cloud. Last year, video generation startup Genmo built a system to train an AI model Nvidia Graphics processing units (GPUs) in the Oracle cloud, said CEO Paras Jain. Genmo now uses the Oracle cloud to produce videos based on the instructions users type on its website.

“Oracle has produced a different product with GPU computing than you can get anywhere else,” Jain said. The company sometimes offers “bare metal” computers that can outperform architectures that use server virtualization, he said.

In it final income statement Earlier this month, Oracle missed analysts’ estimates and issued a forecast that was weaker than Wall Street had expected. The stock had its worst day of 2024, falling almost 7% and posting a year-to-date gain.

Still, Ellison was optimistic about the future.

“Oracle Cloud Infrastructure trains some of the world’s most important generative artificial intelligence models because we are faster and cheaper than other clouds,” Ellison said in the earnings report.

For the current fiscal year ending in May, Oracle is expected to post revenue growth of about 10%, marking its second-strongest year of expansion since 2011.

Jain said that when Genmo faces challenges, it communicates with Oracle sales executives and engineers through a Slack channel. The collaboration has resulted in better reliability and performance, he said. He said Oracle is working with Genmo, enabling developers to run the startup’s Mochi open-source video generator on Oracle’s cloud hardware with one click.

“Oracle was also more cost competitive than these large hyperscalers,” Jain said.

Three months before its December earnings report, at an analyst event in Las Vegas, Oracle issued a rosy forecast for the next three years. Executive Vice President Doug Kehring announced that the company will generate more than $66 billion in revenue in fiscal year 2026. More than $104 billion In FY 2029. The figures suggested an acceleration with an annual compound growth rate of more than 16%, compared to 9%. last quarter.

After Kehring and CEO Safra Catz spoke, it was Ellison’s turn. The company’s chairman, chief technology officer and chief shareholder took the stage in a black sweater and jeans, waved to analysts, licked his lips and sat down. During the next 74 minutes, he answered questions from seven analysts.

“Did he say $104 billion?” Ellison said referring to Kehring’s prediction. Some of the crowd laughed. “It’s going to be so easy. It’s kind of crazy.”

Oracle’s revenue for fiscal 2023 was less than $50 billion.

The new target impressed Scharf Investments managing director Eric Lynch, who held $167 million in Oracle stock at the end of September.

“For a company that’s been in the single digits for a decade or more, that’s incredible,” Lynch said in an interview with CNBC.

Oracle is still far behind in cloud infrastructure. In 2023, Amazon controlled 39% of the market, while Microsoft controlled 23%. Google 8.2% according to industry researcher Gartner. That left Oracle with 1.4%.

But in database software, Oracle remains strong. Gartner estimated the company’s market share in database management systems to be 17% in 2023.

Ellison’s challenge is to find opportunities for expansion.

Last year he He visited the headquarters of Microsoft Redmond announced a partnership in Washington, D.C., that will allow organizations to use the Oracle database through Microsoft’s Azure cloud for the first time. Microsoft even installed Oracle hardware in its data centers.

In June, Oracle introduced similar announcement With Google. Then in September, Oracle finally partnered with Amazon. presents the database In AWS.

Oracle and Amazon have been exchanging barbs for years. AWS introduced its database Aurora in 2014, and Amazon has worked hard to distance itself from Oracle. After a CNBC report on effort, Ellison expressed his doubts About Amazon’s ability to achieve its goal. But the project was successful.

In 2019, Amazon published a blog post Titled “Migration Complete – Amazon Consumer Business Turns Off Last Oracle Database”.

Unlike rival Epic, Oracle Health lost US market share in 2023. KLAS Research. Analysts at Evercore noted last week that Ellison’s relationship with Musk, who is set to lead Trump’s Department of Government Efficiency, could benefit Oracle Health “if there is a bigger push to modernize existing health care systems.” They recommend buying stocks.

For now, Oracle is busy using artificial intelligence to rewrite Cerner’s entire code base, Ellison said at the analyst event.

“It’s another pillar for growth,” he said. “I guess you haven’t seen the whole thing yet.”

A few hours earlier, Ellison called the company’s co-founder and CEO Marc Benioff. Salesforce. Benioff knows Ellison as well as anyone, having worked for him for 13 years before starting his now-major rival cloud software company.

“It was awesome,” Benioff said the next day in a wide-ranging interview about his conversation with Ellison.

Benioff talked about the recent wealth of his former boss.

“Larry really wants it,” Benioff said. “It’s very important to him, he’s building a big company, which he thinks is one of the most important companies in the world, and wealth is very important to him.”

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