Oracle’s Cloud Surge Makes Larry Ellison World’s Richest Man

Larry Ellison has emerged as the world’s richest person following a significant surge in Oracle Corp.’s stock value. On September 10, 2023, shares of Oracle soared over 40%, marking the company’s largest single-day gain since 1992. This remarkable rally was driven by an optimistic forecast for its cloud operations and a landmark contract with OpenAI, positioning Oracle as a formidable player in the competitive artificial intelligence market.

The stock’s explosive performance pushed Oracle’s market valuation to an impressive $969 billion. As a result, Ellison’s net worth increased by $101 billion in a single day, bringing his fortune to $393 billion, surpassing Tesla CEO Elon Musk, whose net worth stands at $385 billion, according to the Bloomberg Billionaires Index.

Oracle’s Ambitious Cloud Strategy

A key factor behind this surge is Oracle’s strategic investment in cloud computing, where it is emerging as a vital provider of AI infrastructure. The company has positioned itself as a direct competitor to major players such as Amazon, Microsoft, and Google. The centerpiece of Oracle’s success is a contract signed earlier this summer with OpenAI, the operator of ChatGPT. This unprecedented deal provides OpenAI with 4.5 gigawatts of data center capacity, enough to power millions of homes in the United States.

In addition to OpenAI, Oracle counts Nvidia and ByteDance’s TikTok among its significant cloud customers. In its first fiscal quarter, Oracle secured four multibillion-dollar contracts with three separate clients, as noted by CEO Safra Catz in an earnings release on September 9. These high-profile contracts have significantly boosted Oracle’s “remaining performance obligations,” a measure of future bookings, to a staggering $455 billion, over four times higher than the same period a year earlier.

Future Growth and Investor Confidence

Bloomberg Intelligence’s analysis emphasizes the importance of this milestone, indicating that Oracle’s backlog is roughly four times that of Google, suggesting a potential growth rate that could outpace its rival. Catz described the quarter as “astonishing,” highlighting the increasing demand for Oracle’s cloud infrastructure. She anticipates that remaining performance obligations will exceed $500 billion in the near future.

Looking ahead, Catz projects that the cloud infrastructure business will expand by 77% to $18 billion this fiscal year, eventually reaching an impressive $144 billion in annual revenue by May 2030. Although the recent earnings report offered a mixed outlook—with cloud infrastructure revenue rising by 55% to $3.3 billion, while adjusted revenue of $14.9 billion and profit of $1.47 per share fell slightly short of analyst expectations—investors are concentrating on Oracle’s long-term potential.

Concerns over the high costs associated with building new data centers remain, with capital expenditures projected at $35 billion this year. Nevertheless, the robust forecast for cloud growth has invigorated investor confidence, marking a pivotal moment for Oracle and solidifying Larry Ellison’s position at the top of the wealth rankings.