Oracle is Genuinely Far Scarier Than Blackrock

Introduction: Oracle’s Meteoric Rise in a Changing Tech Landscape

Oracle, a name once synonymous with enterprise software, has recently captured the world’s attention in ways few could have predicted. Earlier this month, Oracle’s founder Larry Ellison briefly became the richest man on the planet, following a dramatic surge in the company’s stock price. This wasn’t due to stellar financial results—in fact, Oracle reported lower-than-expected earnings and revenue. Yet, the company’s value soared by over 30% in a single day, gaining more market capitalization than the entirety of McDonald’s in just eight hours.

What’s behind this astonishing turn of events? The answer lies in Oracle’s bold pivot to artificial intelligence (AI), its strategic influence in both Silicon Valley and Washington, and its growing entanglement with some of the world’s most powerful media and technology companies. Oracle’s story is no longer just about software—it’s about power, influence, and the future of technology.

Oracle’s Financial Alchemy: Turning Hype into Value

The AI Gold Rush

Oracle’s recent boom is rooted in the global frenzy surrounding AI. The company has aggressively shifted its focus to building massive AI data centers, offering infrastructure to companies that lack the resources to build their own. While cloud computing isn’t new for Oracle, the scale and speed of its expansion have taken many by surprise.

Rebranding as an AI Powerhouse

At nearly 50 years old, Oracle was long seen as a stable, low-growth incumbent in the tech world. But over the past year, it has rebranded itself as a born-again AI startup, attracting the kind of investor excitement usually reserved for much younger companies. The catalyst? Oracle’s announcement of nearly half a trillion dollars in backlogged orders from AI companies eager to use its infrastructure.

The Numbers Behind the Hype

This staggering backlog—$455 billion—has fueled Oracle’s stock surge. But there are three major issues with this number:

• Sustainability: Such massive spending is almost certainly unsustainable. $455 billion is more than 2% of the US GDP, and it’s hard to imagine AI applications that could justify this scale of investment.
• Concentration: Nearly all of this money comes from just four contracts with three clients. Even if split evenly, each client would be spending over $150 billion to rent data center space.
• Speculation: The largest client, OpenAI, has committed to spending over $300 billion with Oracle over five years. However, OpenAI doesn’t have that kind of money—it will need significant outside investment to fulfill this commitment.

The Investment Loop

Coincidentally, Nvidia recently announced a $100 billion investment in OpenAI, which will help fund deals like the one with Oracle. Oracle, in turn, is building its infrastructure with billions of dollars’ worth of Nvidia GPUs. This creates a cycle where outside investor money is funneled through one company to another, inflating valuations and fueling further speculation.

Oracle’s Expanding Influence: From Silicon Valley to Washington

Political Power and Strategic Deals

Oracle and Larry Ellison have long wielded significant financial and political influence. The company spends millions annually on lobbying and political donations, and Ellison himself was one of the biggest spenders in recent elections. Senior Oracle executives have held key government positions, further strengthening the company’s ties to Washington.

The TikTok Connection

One of Oracle’s most consequential moves is its role in the ongoing saga over TikTok’s US operations. The US government has mandated that TikTok’s parent company, ByteDance, sell its American operations due to concerns over data security and influence. Oracle has been selected to oversee the new US platform, giving it unprecedented access to TikTok’s algorithm and user data.While some argue that it’s better for an American company to control this data, the process by which Oracle was chosen has been criticized for its lack of transparency. The $14 billion valuation for TikTok’s US operations is widely seen as an undervaluation, raising questions about the fairness of the deal.

The Ellison Legacy: Media, AI, and the Future of Power

Building a Media Empire

Larry Ellison’s influence extends far beyond Oracle. His son, David Ellison, founded Skydance Media in 2010 with significant family backing. Skydance has since merged with Paramount to form Paramount Skydance, with David retaining voting control. The new company is reportedly eyeing a deal to acquire Warner Brothers, which would make it one of the largest traditional media conglomerates in history.

AI in Entertainment

David Ellison is also a vocal proponent of using AI to reduce costs in movie production—a move that aligns with Oracle’s broader AI ambitions. This synergy between tech and media could reshape both industries, for better or worse.

The Succession Question

Larry Ellison is now 81, and while he remains active, the question of succession looms large. It’s likely that at least some of his influence over Oracle will pass to his son, potentially giving one family control over both a major tech company and a media empire.

The Bigger Picture: Oracle’s Place in a Changing World

Compared to giants like Disney or Facebook, Oracle and Skydance may seem less visible to the average person. But their growing influence in technology, media, and politics makes them key players in shaping the future. As Oracle continues to expand its reach, it’s essential to understand not just what the company does, but how it wields its power.

Live Example: Oracle’s Impact from a User’s Perspective

Imagine you’re a tech entrepreneur looking to launch a new AI-powered app. In the past, you might have struggled to find affordable, scalable computing resources. Now, with Oracle’s massive AI data centers, you can rent the infrastructure you need, scale your business quickly, and even benefit from Oracle’s partnerships with leading AI firms. This new ecosystem, driven by Oracle’s strategic moves, is changing the way startups and established companies alike approach innovation.