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Oracle Enhances Generative AI Features Amid Rising Cloud Market Competition

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Oracle, player in the U.S. cloud infrastructure market, is ramping up its efforts in generative AI as it competes in a crowded field.

Oracle, a major player in the U.S. cloud infrastructure market, is ramping up its efforts in generative artificial intelligence (AI) as it competes in an increasingly crowded field, with an eye on enhancing its cloud services amidst a surge in demand driven by AI innovations.

The rise of AI, particularly following the November 2022 debut of the ChatGPT chatbot, has spurred a significant increase in the need for cloud computing services and data centers. These resources are essential for training AI models and providing access to the extensive data sets that fuel them.

Oracle has been strategically incorporating generative AI features into its existing cloud infrastructure and applications. This new technology complements the traditional AI capabilities, which are adept at pattern recognition and forecasting numerical data.

Rondy Ng, Oracle’s Executive Vice President of Applications Development, explained the synergy between traditional and generative AI to CNBC. “While our existing AI excels at number prediction, integrating generative AI allows us to enhance our capabilities with the ability to explain and generate text, making our solutions more comprehensive,” Ng said.

In March, the company expanded its generative AI offerings across various applications, including finance, human resources, and marketing. These advanced features are designed to automate tasks like creating financial reports and drafting job advertisements, thus boosting productivity and reducing operational costs.

Earlier in the year, Oracle declared the integration of generative AI throughout its technology stack, signifying a deep commitment to this transformative technology.

Industry analysts are optimistic about Oracle’s strategy. Dan Ives of Wedbush Securities praised the company’s position in an email to CNBC. “Oracle is poised to capitalize significantly on the AI wave, thanks to its vast data repositories and established customer base,” he remarked.

As technology providers strive to stay ahead in the generative AI race, Oracle’s approach has been to integrate these capabilities into both existing and new products, responding to the evolving needs of their enterprise clients. According to a Gartner report released on April 17, such proactive adaptation is crucial.

Financial analysts, including those from JPMorgan, forecast that generative AI will catalyze additional IT spending, benefiting companies like Oracle that are investing heavily in AI technologies.

Oracle’s financial performance reflects these strategic moves, with a notable 23.74% increase in share price over the past year. The company also expects further revenue growth from AI in the coming years, a sentiment underscored by CEO Safra Catz during the fiscal third-quarter earnings call. Catz highlighted significant new contracts and a robust backlog in cloud infrastructure.

Looking ahead, Oracle’s Chairman and CTO Larry Ellison has outlined plans for expanding the company’s cloud infrastructure market and AI capabilities, including constructing a new data center in Salt Lake City and developing sovereign AI cloud solutions that operate exclusively within specific countries. This forward-thinking approach positions Oracle favorably as nations increasingly seek to localize their AI data processing and storage.

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