- The next Oracle data center may need the energy of temporary gas generators
- The West Texas Data Center could be online before it is connected to the grid
- Oracle recently added a number of main customers for its cloud services
A new Bloomberg The survey on Oracle operations revealed how the company has gone from a pioneer from the database to a large cloud service provider in the last decade – an improbable transition when the CEO of the Larry Ellison (now CTO) time called “complete” cloud computing in 2008.
Today, however, Oracle is responsible for the food of XAI in UTAH and the construction of GPU clusters for Nvidia in Singapore, Japan and Indonesia, not to mention its joint effort with Openai worth 5 + GW of the computing power.
Then, in 2022, Tiktok became an important client for Oracle. Now, buying all American traffic via Oracle, Tiktok generates around $ 1 billion for Oracle each year.
The future plans of the Oracle Data Center
However, all of this has had a cost, and Oracle must now add more data center capacity to meet demand. The company has already undertaken to spend tens of billions on mega-sitis despite the obstacles of the supply chain, but the request for Openai from the Stargate project added even more pressure.
Consequently, its “frontier” campus in western Texas may need temporary gas power until the network connections arrive. Should boast of a capacity of 1.4 GW, it could cost Oracle more than $ 1 billion per year to supply gas generators (according to Bloomberg, citing people familiar with plans).
This happens at a time when Oracle faces financial difficulties, even despite growth. For the first time since 1990, Oracle recently displayed its first negative cash flow due to a wave of spending.
“Oracle goes through a transformation of the business model,” noted Mark Moerdler, analyst of Bernstein. “We believe that the margin will rebound and that the cash flows will be substantial once they have successfully completed this investment phase.”
Speaking in financial year 2025, CEO Safra Catz said Oracle was expecting higher cloud infrastructure growth rates and the total growth rates of the cloud this year despite a sharp increase from last year.
“Oracle is on the right way to be not only the largest cloud application company in the world – but also one of the largest cloud infrastructure companies in the world,” added Catz.
