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Greetings! Oracle founder and chairman Larry Ellison is suddenly the tech executive in the center of the action. Not only did Oracle bring back TikTok on Sunday, the aging tech firm also got a headline role, along with SoftBank and OpenAI, in President Donald Trump’s Tuesday announcement of an artificial intelligence data center project that will cost up to $500 billion over the next four years. Trump’s admiration for Ellison was evident at today’s press briefing for the venture: The president called Ellison an “amazing man” who is more than just a technology executive—he’s a “CEO of everything.” The irony, of course, is that Oracle, with a market capitalization of $480 billion, is tiny compared with Amazon, Microsoft and Google. The three leaders in the cloud industry are each worth between $2.4 trillion and $3.2 trillion each. Oracle’s share of the cloud market is similarly small—around 3%, according to Synergy Research Group, compared with 32% for Amazon, 23% for Microsoft and 12% for Google. That lagging position is one reason why Oracle’s prominent role in the venture is surprising. In contrast, Microsoft, OpenAI’s longtime backer, has only a minor role as a “technology partner,” (whatever that means) according to OpenAI’s announcement of the venture. Oracle’s fledgling cloud business has gotten a lift thanks to a shortage of computing capacity for AI, which in turn has lifted its stock price 58% last year and a little more this year. Its participation in the venture promises to enhance Oracle’s status in AI even further. Today the company’s shares jumped 7% on news of the venture. Whether that stock reaction is warranted is difficult to say, given that details of the venture are scarce, particularly how much money Oracle is on the hook for. (Oracle is one of the initial “equity funders,” OpenAI revealed, without specifying what that meant.) Investors also seem to be ignoring the uncertain legal territory that Oracle is in, after restoring the TikTok app to life on Sunday on the strength of Trump’s promise to issue an executive order delaying the ban. As various congresspeople have pointed out, Trump’s executive order doesn’t override the ban-or-sell law. Ellison is likely making a bet that there’s little risk of anyone successfully going after Oracle on the TikTok issue, although it’s notable that neither Apple nor Google has made the same bet: TikTok remains unavailable in their app stores. One question now is whether Oracle will play a role in any eventual TikTok deal. That was the plan back in 2020, and there’s no reason why it wouldn’t happen again. Imagine, say, Oracle and Elon Musk’s companies teaming up to take a 50% stake in TikTok, if Trump can negotiate a compromise with the Chinese. (At today’s briefing, Trump said he was open to both Musk and Ellison buying TikTok.) Increasingly, it seems Ellison is the tech executive to watch. Adding live sports proved its value for Netflix in the fourth quarter—in subscribers, if not in profits. The company added nearly 19 million subscribers in the quarter, it said Tuesday, its biggest quarter ever for subscriber growth. Even in the first quarter of 2020, during the pandemic lockdowns, Netflix added only 15.8 million subscribers. Of course, as a percentage of its existing base, the fourth-quarter expansion wasn’t as impressive as the growth in the Covid-19 period. The 15.8 million subscribers Netflix added then was an increase of 9.4% from the previous quarter, whereas the nearly 19 million subscribers represented growth of 6.7% from the third quarter. Still, the bigger a company gets, the harder it usually is to grow, so hats off to Netflix for this accomplishment. One likely explanation is Netflix’s addition of high-profile live sports, specifically the Mike Tyson–Jake Paul fight in November and two NFL games on Christmas Day. Those programs were expensive, however, and predictably Netflix’s operating profit margin fell by 7 percentage points in the quarter. Yes, sports brings in subscribers—but at what cost?
- Stablecoin giant Circle said on Tuesday it is acquiring Hashnote, a firm that puts money market funds on blockchain, in a deal that will allow Circle to offer a stablecoin alternative that pays out interest.
- Microsoft will no longer be OpenAI’s exclusive cloud provider, but will still have “right of first refusal” over OpenAI’s new cloud deals, the company said Tuesday.
- Seagate Technology, which makes hard drives for data storage, saw its stock price rise by 4% shortly after it reported a 50% increase in revenue to $2.3 billion in the December quarter. Seagate CEO Dave Mosley attributed the uptick in large part to growing demand for data storage products from cloud computing providers.
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