GoKawiilis a reporter who writes about tech, money, and human behavior. She joined The Verge in 2014 as science editor. Previously, she was a reporter at Bloomberg.
If you want to know whether the AI bubble is bursting, there’s only one publicly traded company that will tell you: Oracle.
That’s right, the database company. Oracle has burned its boats and pivoted to AI, but not in any kind of usual way. It is not a foundation model builder like OpenAI or Anthropic, obviously. It’s not quite a neocloud, though it has entered the same bare-metal business as CoreWeave. It is a software-as-a-service company that has made an audacious bet on a very specific future version of AI as Oracle’s traditional business has gracefully declined. It is significantly older than any of its AI competitors, save Microsoft, and it has decided its future involves an enormous compute deal with OpenAI, a company that does not make money.
Whether OpenAI is good for its commitments to Oracle depends a lot on how much money it can raise and how quickly it can become profitable. The risk for Oracle is that it may be sinking a lot of money into building data centers for OpenAI, only for OpenAI to be unable to pay Oracle the $300 billion it agreed to in their contract. Oracle and OpenAI did not respond to requests for comment.
But the OpenAI play — and the pivot to AI generally — suggests a specific vision: The key place to make money isn’t training foundation models. The real money is inference, or using AI models to output results on data that isn’t in the training set. So the company has looked at some startups’ businesses and decided that they are actually just features that can be added to Oracle’s existing capabilities — which is pretty much what Oracle has been up to for the entirety of its existence.
Oracle, of course, is already an enterprise business, so it has the existing relationships and large salesforce to go out there and sell its vision, one that suggests there isn’t much room for the AI stack to fragment. Rather, it will consolidate under existing players. Oracle intends to be the dominant player in that game.
Wall Street wants to bet on AI, and it can’t bet on OpenAI because it’s not public yet. So the best way to do it now is through Microsoft and Oracle. Microsoft has a more complicated business, so it’s not a pure AI bet. Oracle, on the other hand, is cleaner. That means you can take the temperature of the entire AI boom by checking in on how many people are betting Oracle won’t repay its loans on time — those are the credit default swaps. Oracle’s stock price also reacts to assorted and sundry industry events, providing a bellwether about the AI revolution — or the AI bubble, depending on how you view it.
But there’s always a tremendous gap between vision and execution, as Oracle’s history shows.
“The orthodox company is low-growth and high-margin and makes him feel old and uncool.”
Let’s get it out of the way: Oracle founder Larry “Bad Doggy” Ellison is out of his fucking mind. He has a short attention span, a willingness to promise things his engineers have not yet built, a tremendous ego, and a competitive drive that could power every AI data center on Earth and then some. Ellison is nominally the chief technology officer and executive chairman of Oracle, and Clay Magouyrk and Mike Sicilia are nominally the co-CEOs. But Oracle has always been the Larry show, starring Larry, even when he’s busy cheating at yacht races or whatever.
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