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AI Investment Boom Fuels Tech Rally: Larry Ellison's $100 Billion Prediction and Market Strategies
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Danny Riley
September 13, 2024
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There are a lot of reasons for the big tech names going back up—oversold conditions, bargain hunters, tech ETF buying; the list could go on and on. There are too many reasons to list them all here, but somewhere near the top of the list is this story on Larry Ellison. I know there is a lot of talk about an AI bubble for which, unlike the tech bubble, there is no shortage of investment capital.
Oracle's Larry Ellison Sees $100 Billion AI Boom Powered by Nuclear Energy -- Barrons.com
Larry Ellison has a message for the artificial-intelligence infrastructure skeptics: The current boom will last for years, and not end soon. When asked on Oracle's Monday earnings conference call about the sustainability of the latest wave of AI model training infrastructure spend, the executive was optimistic. "If your horizon is over the next five years, maybe even the next ten years I wouldn't worry about it," Oracle's founder, chairman, and chief technology officer said. "This business is just growing larger and larger and larger. There is no slowdown or shift coming."
Ellison said there are a few large technology companies, and possibly even one country that will battle it out for AI model "technical supremacy" in the next several years. And to be competitive in the cutting-edge AI model race will not be cheap, he says. The entry price "is around $100 billion. Let me repeat, around $100 billion. That's over the next four, five years for anyone who wants to play in that game," he said. "That's a lot of money and it doesn't get easier."
Earlier this year in a podcast interview, Meta Platforms founder, Chairman, and CEO Mark Zuckerberg said current data centers were roughly in the order of 50 megawatts in electrical power needed, but said someday one gigawatt data centers would be built. Oracle seems to be almost there. Ellison mentioned Oracle is currently building a 800 megawatt data center that will have "acres of Nvidia GPU clusters" that will be used to train one of the world's largest AI models. Further, the company is already in the design phase for a data center that will require over one gigawatt of electricity. "The location and the power place we've located," he said. We "already got the building permits for three nuclear reactors. These are small modular nuclear reactors to power the data center. This is how crazy it's getting."
Oracle reported a strong fiscal first quarter late Monday.