Oracle is solidifying its position as a major force in the artificial intelligence sector through significant infrastructure deals and is set to play a crucial role in the U.S. operations of TikTok. This development follows past predictions by cofounder Larry Ellison about a future shaped by AI-driven surveillance.
The technology giant recently secured a landmark $300 billion cloud computing contract with OpenAI and is central to a proposed deal for TikTok's U.S. business, which includes managing the platform's algorithm and security infrastructure.
Key Takeaways
- Oracle has secured massive AI infrastructure deals, including a $300 billion contract with OpenAI.
- The company is positioned to manage the algorithm and security for TikTok's U.S. operations.
- An executive order has been signed to facilitate a U.S.-based ownership structure for the popular video app.
- Larry Ellison previously forecasted a future where AI would process vast amounts of recorded data to monitor behavior.
Oracle's Expanding Influence in Artificial Intelligence
Oracle has emerged as a critical infrastructure provider in the rapidly growing AI industry. The company's recent business achievements underscore its strategic shift towards supporting large-scale AI computations.
A recent agreement with OpenAI, valued at $300 billion, is one of the largest cloud contracts ever signed. Under the terms of the deal, OpenAI will purchase computing power from Oracle over approximately five years to support its AI model development.
Further expanding its footprint, Oracle also signed deals with SoftBank and OpenAI to develop new data centers for the extensive Stargate Project. This initiative aims to build a massive supercomputer to power future AI advancements.
Explosive Contract Growth
During its latest quarterly earnings call, Oracle management reported a staggering $455 billion in signed contracts, marking a 359% increase from the previous year. This growth is largely attributed to the immense demand for AI computing resources.
Oracle CEO Safra Catz confirmed that the company secured major deals with three separate customers during the last quarter, highlighting the intense demand for its cloud infrastructure services.
A Pivotal Role in the TikTok Acquisition
In addition to its infrastructure deals, Oracle is expected to be a central player in the acquisition of TikTok's U.S. business from its Chinese parent company, ByteDance. The deal structure places Oracle at the heart of the app's technical and security oversight.
On Thursday, President Donald Trump signed an executive order that paves the way for the popular video-sharing platform to be managed by U.S. interests. This move addresses long-standing national security concerns regarding user data and content algorithms.
Under the proposed arrangement, Oracle will be tasked with spearheading the U.S. oversight of TikTok's algorithm and overall security. Reports indicate that Oracle will recreate the app's recommendation algorithm to create a new, U.S.-based version and ensure the protection of American user data.
Details of the US Ownership Structure
While the final ownership structure is still being finalized, President Trump has indicated that Oracle and its chairman, Larry Ellison, will have a "big" role in managing the application. The new board is also expected to include prominent figures such as conservative media mogul Rupert Murdoch and computer billionaire Michael Dell.
The president also hinted that three additional "blue-chip" companies are part of the ownership group, though they have not yet been named. This consortium of U.S. investors is designed to ensure that control of the platform rests firmly within the United States.
"This deal will allow for the U.S. to control the app’s algorithm. It’s actually going to be American-operated all the way."
– Vice President JD Vance
Vice President JD Vance emphasized the importance of American control over the platform's core technology. He stated that the algorithm will be "under the control of American investors" and promised that more details about the arrangement would be released soon.
Ellison's Vision of a Supervised Future
The recent developments align with a vision Oracle cofounder Larry Ellison described a year ago. At a financial analyst meeting, he predicted a future where constant surveillance and AI-powered analysis would become commonplace.
A Prediction from 2024
In September 2024, Ellison spoke about a world where cameras on dashboards, doorbells, and security systems would document daily life. He suggested that artificial intelligence would be essential for processing this enormous volume of video footage.
Ellison elaborated on this concept, suggesting it would apply to everyone, including law enforcement. He forecasted a system of constant supervision where AI would automatically flag and report problematic behavior.
"We’re going to have supervision. Every police officer is going to be supervised at all times, and if there’s a problem, AI will report that problem... Citizens will be on their best behavior because we are constantly recording and reporting everything that’s going on."
– Larry Ellison, September 2024
These past comments have gained new significance as Oracle steps into a role that involves not only providing the infrastructure for AI but also overseeing a major social media platform's algorithm. The company's deep involvement in both AI infrastructure and social media governance places it at the center of discussions about technology, privacy, and security.
Market Implications and Future Outlook
Oracle's strategic moves into AI infrastructure and social media oversight represent a significant shift for the enterprise software company. These developments position it as a direct competitor to other major cloud providers like Amazon Web Services, Microsoft Azure, and Google Cloud, particularly in the high-demand AI market.
The TikTok deal, if finalized, would give Oracle unprecedented influence over one of the world's most popular social media platforms. This new role moves the company beyond its traditional database and enterprise software focus and into the complex world of content moderation, data privacy, and algorithmic governance.
As Oracle continues to build out its AI capabilities and takes on new responsibilities in the digital public square, its influence on the future of technology and society is set to grow substantially. The company's ability to manage these complex technical and ethical challenges will be closely watched by regulators, competitors, and the public alike.