AUSTIN, Texas - In a significant move for the artificial intelligence industry, Oracle (NYSE:ORCL) has announced a partnership with Microsoft (NASDAQ:MSFT) and OpenAI to enhance Microsoft Azure's AI platform by integrating it with Oracle Cloud Infrastructure (OCI). This collaboration aims to provide additional capacity for OpenAI, the AI research and development company known for its generative AI services and ChatGPT, which serves over 100 million users monthly.
OpenAI's CEO, Sam Altman, expressed enthusiasm for the partnership, highlighting the scalability benefits that OCI will bring to Azure's platform, facilitating further growth for OpenAI. Similarly, Oracle Chairman and CTO, Larry Ellison, underscored the high demand for Oracle's Gen2 AI infrastructure and touted OCI as the "world's fastest and most cost-effective AI infrastructure."
The integration is expected to propel AI innovation by leveraging OCI's AI infrastructure, which is already utilized by a host of AI innovators across various industries. Companies such as Adept, Modal, MosaicML, NVIDIA (NASDAQ:NVDA), Reka, Suno, Together AI, Twelve Labs, and xAI use OCI Supercluster for training and inference of next-generation AI models.
OCI's AI capabilities are designed to allow startups and enterprises to build and train models more efficiently and reliably within Oracle's distributed cloud. For large language models (LLMs), OCI Supercluster can scale up to 64k NVIDIA Blackwell GPUs or GB200 Grace Blackwell Superchips, featuring ultra-low-latency RDMA cluster networking and a selection of HPC storage options. OCI Compute virtual machines and OCI's bare metal NVIDIA GPU instances support a range of applications, from generative AI to computer vision and recommendation systems.
Oracle, which offers integrated application suites and secure, autonomous infrastructure in the Oracle Cloud, is listed on the New York Stock Exchange under the ticker NYSE: ORCL. The company is known for its registered trademarks, including Oracle, Java, MySQL, and NetSuite, the latter being recognized as the first cloud company.
This strategic partnership is based on a press release statement and signifies a concerted effort by leading tech companies to meet the growing demand for advanced AI capabilities and infrastructure.
In other recent news, Oracle has made significant strides in its cloud services and artificial intelligence (AI) offerings. The company announced a partnership with Google (NASDAQ:GOOGL) Cloud to facilitate enterprise customers' application migrations and modernization efforts. The partnership will leverage Oracle Cloud Infrastructure (OCI) and Google Cloud technologies, including Google Cloud's Cross-Cloud Interconnect and Oracle Database@Google Cloud, providing customers with enhanced cloud migration and management capabilities.
Oracle's stock has been maintaining a steady performance, with Barclays (LON:BARC) maintaining its Overweight rating and a price target set at $147.00. The company's revenue growth guidance for the fiscal year 2025 is expected to be a key focus for investors. Evercore ISI also maintained an Outperform rating on the company, citing the anticipation of a solid fourth quarter and a fiscal year 2025 guidance that aligns with current estimates.
Oracle has also been in the spotlight for its AI developments. The company rolled out new AI tools for its Oracle Fusion Cloud Customer Experience, aimed at improving customer satisfaction and accelerating deal cycles. Additionally, Elon Musk's xAI is planning to construct a supercomputer potentially in collaboration with Oracle by fall 2025.
InvestingPro Insights
Oracle's recent partnership with Microsoft and OpenAI underscores its commitment to the AI industry, which is mirrored in its financial metrics and strategic positioning. With a robust Market Cap of $340.29 billion USD and a P/E Ratio of 31.89, the company reflects substantial investor confidence in its ability to leverage its strong market presence.
InvestingPro data highlights Oracle's solid Revenue Growth over the last twelve months as of Q3 2024, standing at 9.49%, which indicates the company's ability to expand its operations effectively. Additionally, Oracle's Gross Profit Margin of 71.53% showcases its efficiency in maintaining profitability amidst its expansion efforts.
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