“Leasing has always been the preference over building its own. Oracle has recently increased its focus on cloud services and ramped up its capex, but I’ve not seen evidence that the strategy of leasing rather than building has changed,” said John Dinsdale, chief analyst and research director for Synergy Research Group.
Ellison appears to be taking the lead in this effort, and he’s the wrong one for this role, argues Rob Enderle, principal analyst with The Enderle Group. “It’s not that he can’t execute, it’s just that he’s been removed from technology for a while. This is probably a huge step too far for him, given his more recent background and level of engagement,” he said.
Another question is the role for OpenAI. It still hasn’t figured out how to monetize ChatGPT and the company is bleeding money, requiring a significant cash infusion/investment from Microsoft.
ChatGPT partner Microsoft is conspicuously absent from the announcement. This prompted speculation on X that the two companies were parting ways, a rather difficult thing to do given that Microsoft owns a 49% stake in OpenAI.
For its part, Microsoft issued a glowing statement stating that their partnership remains in place through 2030 and that OpenAI had made recent contribution to the Azure service. But CEO Satya Nadella did get in a little dig in an interview with CNBC when the issue of funding the $500 billion project. “Look, all I know is, I’m good for my $80 billion,” he said, a reference to a recent promised investment of $80 billion in Microsoft data centers.
Another missing player is Nvidia, which is usually involved in everything AI. Oracle has made a significant investment in deploying Nvidia product in its data centers, so you think that they would have been some involvement. But no, all an Nvidia spokesperson had to say was “Nvidia is delighted to push the limits of computing as OpenAI discovers the next frontier of AI.”
