The Morning Download: Oracle's AI Future, Foretold

Good morning. True to its name, Oracle has been able to anticipate where demand for technology was headed, and invest in that future. Time and again, the company saw the road ahead with clarity and acted with conviction, defying skeptics who doubted that its capital spending would pay off. That’s strong leadership.

That effort has unfolded in stages, beginning with its early investments in cloud computing, followed by its more recent push into AI data centers and infrastructure. Yesterday, the company’s shares rose nearly 10% in extended trading after the company announced quarterly results that reflected strong growth on both fronts. As Bloomberg reports:

• Revenue in Oracle’s infrastructure business increased 84% to $4.9 billion in the period ended Feb. 28, and total revenue will reach $90 billion in the fiscal year beginning in June.
• The company is working to deliver on massive cloud infrastructure contracts with customers like OpenAI and Meta Platforms, and said the demand for cloud computing for AI training and inferencing continues to grow faster than supply.

Oracle is reshaping its workforce and internal operations in anticipation of AI’s growing impact, too. From The Wall Street Journal:

Internally, Oracle is adopting AI coding tools, which are helping make its software-as-a-service business run more efficiently. It is using AI to build new SaaS products and embed agents into existing applications, co-Chief Executive Mike Sicilia said.

The move is making it more efficient to build software with fewer people, and Oracle has shrunk its product development teams as a result. Oracle spent $153 million on restructuring costs in the quarter, which included severance expenses.

Sicilia on the call also addressed concerns about AI replacing SaaS companies, which make up a significant portion of Oracle’s business. Shares of software stocks took a beating in February because investors were worried AI would deem SaaS companies obsolete.

“Some smaller or single-focused SaaS players may well be disrupted,” Sicilia said. “But Oracle will not be among them.”

The question for leaders of all companies is the extent to which Oracle has foretold the AI-driven future of their companies, as well as its own. Given that those companies are Oracle’s customer base, its job is to understand their direction. The prophecy is exponential demand for AI, across the economy.

Correction: Bloomberg reported that Oracle’s infrastructure business increased 84% to $4.9 billion. An earlier version of this newsletter incorrectly attributed the Bloomberg report to Barron's.

Big Tech is getting its claws into agents. Nvidia is planning to release its own open-source AI agent platform targeting enterprise customers, Wired reports. Called NemoClaw, the tool will include built-in security and privacy features, addressing concerns that have slowed AI agent adoption in corporate settings. The announcement taps into growing excitement around "claws," a class of locally-run, open-source AI agents gaining traction in the developer community.

Meanwhile... Moltbook, the viral social network created to host OpenClaw agents, has been acquired by Meta Platforms for an undisclosed amount. The tech giant said Tuesday the Moltbook team will join its Superintelligence Labs division, known as MSL.

The Anthropic/Pentagon saga continues. A day after Anthropic sued the Pentagon over its designation as a national security supply risk, the Department of Defense announced a new agreement with rival Google. The deal gives DoD employees access to Gemini's Agent Designer, a tool that lets users build custom AI agents using natural language, Bloomberg reports. Emil Michael, the under secretary of defense for research and engineering, said the agents will initially be limited to unclassified networks.

And Microsoft in a Tuesday filing in U.S. District Court in San Francisco backed Anthropic's push for a temporary restraining order against the Pentagon's supply chain risk designation, warning that without one, tech companies would need to "act immediately to alter" product and contract configurations used by the Defense Department, CNBC reports. In November, Microsoft along with Nvidia announced plans to invest up to $15 billion in Anthropic.