Oracle expects data-hungry generative AI to drive revenue growth

Oracle is betting on high demand for data, driven by generative AI-related workloads, to boost revenue in upcoming quarters as enterprises look to adopt generative AI for productivity and efficiency.

“Generative AI is changing everything. As of today, AI development companies have signed contracts to purchase more than $4 billion of AI training capacity in Oracle’s Generation 2 cloud. That’s twice as much AI training as we had booked at the end of the last Q4,” Larry Ellison, executive chairman, and chief technology officer at Oracle, said during an earnings call with analysts.

This demand in generative AI workloads, according to Ellison, will sustain itself as enterprises will have to continue feeding data to the AI engine or models to keep them up-to-date or relevant, which in turn will create demand for Oracle’s offerings for model training, inferencing, and grounding.

The proliferation of generative AI is also expected to drive up demand for Oracle’s databases as well, Ellison said, adding that Oracle’s new vector databases will allow enterprises to store specialized data for training models while maintaining the anonymity and privacy of the datasets.  

Earlier in July, a top Oracle executive had laid down Oracle’s three-tier approach to attract more revenue from generative AI offerings to take on rival cloud service providers — AWS, IBM, Google Cloud, and Microsoft. 

Second quarter cloud revenue to grow up to 31%

Oracle, which posted its first-quarter earnings for the fiscal year 2024 on Monday, expects its cloud revenue for the second quarter, with the exclusion of revenue from Cerner, to grow by up to 31%, buoyed by the phenomenon of enterprises adopting more AI services.