Oracle Shares Surge on Potential AI Partnership with OpenAI

Oracle Shares Head Toward a New Closing High on AI Enthusiasm

Shares of Oracle have risen about 70% this year, yesterday closing at a record-high $174.37. Oracle (ORCL) shares were on track to close at a fresh high, lifted by indications that the cloud computing company may be becoming a favorite of a giant in the artificial intelligence (AI) industry: ChatGPT developer OpenAI. The tech news site The Information reported that executives at OpenAI aren't happy with the speed at which Microsoft (MSFT) is moving to supply servers. It said the leadership told employees that the company would be taking on a larger role in securing data centers and AI chips, rather than depending solely on Microsoft. That may have opened the door further for Oracle. The site pointed to OpenAI's June deal to rent Oracle servers at a new data center in Texas with limited input from Microsoft, even though Microsoft with its Azure cloud services was OpenAI's exclusive cloud provider. While OpenAI is independent from Microsoft, the companies have a "strategic partnership." At the time, OpenAI CEO Sam Altman said the company "was delighted" to be working with both firms, and that the Oracle Cloud Infrastructure (OCI) "will extend Azure's platform and enable OpenAI to continue to scale." Oracle CEO Larry Ellison added that AI leaders such as OpenAI are choosing OCI "because it is the world's fastest and most cost-effective AI infrastructure." Shares of Oracle, recently up nearly 2% to above $177, have risen about 70% this year, yesterday closing at a record-high $174.37. They're among the best-performing tech shares in the S&P 500.

Why Investors Were Hot on Oracle Stock Today | The Motley Fool

OpenAI and Oracle apparently in discussions for AI hardware According to a report from tech industry news site The Information, leading AI solutions developer OpenAI is discussing a deal with Oracle. Citing an unnamed "person who heard the remarks," the former company's management told certain employees that OpenAI "would play a greater role in lining up data centers and AI chips" to advance the technology, rather than depending entirely on its partner Microsoft to do so. The article stated that OpenAI is dissatisfied with the speed at which Microsoft is supplying it with servers. AI is resource-intensive, and requires significant amounts of processing power and storage. Microsoft is a major investor in OpenAI, having poured billions of dollars into the company. Neither Oracle nor Microsoft or OpenAI has yet officially commented on this report. If the article is accurate, Oracle stands in front of an exciting and potentially very lucrative business opportunity with OpenAI (developer of the most high-profile commercial AI program, ChatGPT). If these discussions are occurring, they are at an early stage, however, and investors should not pile into Oracle stock on that basis alone.