- Oracle’s upcoming data center may need power from temporary gas generators
- West Texas Data Center could come online before it gets connected to the web
- Oracle recently added a number of larger customers to its cloud services
A new one Bloomberg Investigation of Oracle’s operations has revealed how the company has turned from a database pioneer to a major cloud service provider in the last decades of an unlikely transition when the then CEO Larry Ellison (now CTO) called Cloud Computing “Complete Gibberish” in 2008.
Today, however, Oracle is responsible for operating Xai in Utah and building GPU clusters for Nvidia in Singapore, Japan and Indonesia, not to mention its joint effort with Openai worth 5+GW Computing Power.
Then in 2022 Tiktok became an important customers for Oracle. Now all American traffic is directing through Oracle, Tikkok generates about $ 1 billion in revenue for Oracle every year.
Oracle’s future data center plans
However, all this has come at a price, and Oracle now has to add more data center capacity to keep up with demand. The company has already committed to spending tens of thousands of billions on megasites despite supply chain barriers, but the Openai demand from the Stargate project has added even more pressure.
As a result, its West Texas ‘Frontier’ campus could need temporary gas power until grid connections arrive. It is expected to boast of a 1.4 GW capacity, it could cost Oracle over $ 1 billion annually to power using gas generators (according to Bloomberg, referring to people familiar with the plans).
This comes at a time when Oracle is facing economic matches, even despite growth. For the first time since 1990, Oracle recently announced its first negative cash flow due to an increase in expense.
“Oracle is undergoing a business model transformation,” noted Bernstein analyst Mark Moerdler. “We think the margin will rebound and the cash flow will be significant when they get through this investment phase.”
When he talked about the financial year 2025, CEO Safra Catz said that Oracle expects higher growth speeds for cloud infrastructure and the overall skybearing speeds this year despite a strong Uptick last year.
“Oracle is well on its way to not only being the world’s largest cloud application company – but also one of the world’s largest cloud infrastructure companies,” Catz added.
