Recently, Oracle announced its financial performance for the fourth quarter and full fiscal year of 2024, falling short of market expectations across all metrics.

Meanwhile, the company revealed partnerships with Google Cloud, OpenAI, and Microsoft, triggering a significant increase in its stock price to a historic high.

Disappointing Financial Performance

On June 11, Oracle reported revenue and profits for Q4 and the full fiscal year of 2024, both below expectations.

The company's Q4 revenue was $14.29 billion, a 3% year-over-year increase, while net profit decreased by 5% to $3.14 billion, with an adjusted EPS of $1.63.

Core business segments like cloud services and license support revenue grew by 9% to $10.23 billion year-over-year, and cloud infrastructure revenue rose by 42% to $2 billion, although slower than the previous quarter's 49% annual growth.

The report also noted that Oracle's fourth-quarter remaining performance obligations (RPO) reached $98 billion, a 44% increase year-over-year, reflecting anticipated revenue from contracts over the coming quarters.

Oracle CEO Safra Catz mentioned that demand for Oracle Cloud Infrastructure (OCI) surged, with significant high-value contracts signed in the first two quarters, totaling over $12.5 billion. She anticipated a 6% to 8% year-over-year revenue growth for the current quarter and projected double-digit revenue growth for fiscal year 2025.

During the earnings call, Oracle's Chairman and CTO Larry Ellison discussed the construction of a massive-scale data center to support AI model training and updates.

Following the report's release, UBS reiterated a "buy" rating on Oracle's stock, while analysts at Morgan Stanley expressed skepticism about the company's long-term prospects.

Multiple Cloud Collaborations

Alongside its financial results, Oracle announced collaborations with Google Cloud, Microsoft, and OpenAI to enable customer access to its cloud infrastructure.

With Google Cloud

Oracle also disclosed a collaboration with Google Cloud to support Google Cloud's "Cross-Cloud Interconnect" service, set to launch later this year.

Starting November, enterprise customers can migrate applications to Google's public cloud using Oracle databases without incurring cloud data transfer fees.

With OpenAI and Microsoft

Simultaneously, Oracle partnered with OpenAI to expand Microsoft's Azure AI platform to OCI for scaling OpenAI's capabilities.

Since September last year, Oracle has been a partner with Microsoft, allowing customers to leverage Oracle databases on Microsoft's Azure cloud platform. Currently, Oracle-linked Azure data center regions have expanded to 15.

Larry Ellison emphasized OCI as the world's fastest and most cost-effective AI infrastructure, gaining favor among several tech giants. He stated, "The competition for LLM is now global, driving unlimited demand for Oracle's second-generation AI infrastructure."

Additionally, Ellison clarified that OpenAI will use OCI for deploying AI models, not for AI training, despite earlier misconceptions.

OpenAI's Clarification

In an official statement, OpenAI clarified that its strategic cloud relationship with Microsoft remains unchanged, with Microsoft remaining its exclusive cloud platform provider. The new collaboration allows OpenAI to use Azure AI platform on OCI for inference and other needs.

OpenAI also affirmed that pre-training of its cutting-edge models will continue on the supercomputers jointly built with Microsoft.

Having long-established ties with Microsoft, which has invested approximately $13 billion in OpenAI, acquiring a 49% stake and exclusive commercial licensing rights to its technology.

OpenAI CEO Sam Altman acknowledged the need for increased computational power to support its services. In March 2024, discussions between the two companies also included plans to establish a $100 billion, 5 gigawatt supercomputing campus for ChatGPT.