Dive Brief:
- Oracle has announced plans for massive cloud data-center buildouts to meet the demands of enterprise migrations, AI workloads, and sovereign solutions during a Q2 2024 earnings call.
- The company aims to expand capacity at 66 existing data centers and construct 100 more, including 20 connected to Azure infrastructure, according to Chairman and CTO Larry Ellison.
- Ellison mentioned that the company has “billions of dollars more in contracted demand than we currently can supply,” indicating a need for rapid expansion.
- Oracle plans to build its own public regions based on direct customer demand, as well as 20 data centers for Microsoft, bringing the total to 100 data centers.
Dive Insight:
Data-hungry large language model training has already consumed much of Oracle’s available high-intensity compute. According to CEO Safra Catz, there has been a significant increase in demand for cloud infrastructure and generative AI services, with cloud revenue growing 24% year over year to reach $4.8 billion, including infrastructure and software services.
The company has seen strong demand for its Gen 2 Cloud capacity, particularly from AI development companies. Oracle’s capital expenditures are expected to reach roughly $8 billion before the fiscal year ends on May 31, driven by the demand for cloud infrastructure services and new Oracle cloud data centers.
Ellison also highlighted the role of multicloud partnerships in Oracle’s expansion plans, emphasizing the importance of interconnected cloud environments for customers. The company is leveraging enterprise data migrations and AI compute to fuel its cloud business and expects cloud database services to contribute to revenue growth.
Catz mentioned that the only limiting factor to Oracle’s growth is the ability to get data centers handed over and filled up fast enough, indicating a strong demand for their services across various industries and regions.
