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LOS ANGELES, CALIFORNIA - OCTOBER 24: Larry Ellison attends the Rebels With A Cause Gala 2019 at Lawrence J Ellison Institute for Transformative Medicine of USC on October 24, 2019 in Los Angeles, California. (Photo by Phillip Faraone/Getty Images)

Oracle plans to build data centers in every country

In the recent Q2 2024 earnings call, Oracle’s founder and CTO, Larry Ellison, unveiled ambitious plans to significantly expand the company’s global data center footprint.

The strategy involves the enhancement of 66 existing cloud data centers and the construction of an additional 100 new ones.

Building upon the announcement made at the Oracle Database Summit earlier in the year, Ellison reiterated the company’s commitment to establishing “hundreds of data centers” worldwide, with the goal of having a presence in every country. Oracle’s global expansion aims to create numerous relatively small and cost-effective cloud data centers, all fully automated, addressing considerations such as lower latency, data sovereignty, cybersecurity, and privacy.

Ellison emphasized the differentiation of Oracle’s approach, highlighting that while other hyperscalers are building a small number of large and expensive data centers, Oracle intends to build hundreds, all fully automated and capable of running every cloud service offered by the company. This comprehensive coverage is designed to provide a seamless experience for customers, in contrast to competitors with services available in some regions but not others.

Oracle’s CEO, Safra Catz, provided insights into the current state of the company’s cloud infrastructure, detailing 66 customer-facing cloud regions, 45 public cloud regions globally, with six under construction. The infrastructure also includes 10 live dedicated regions, 13 planned, nine national security regions, and two EU sovereign regions.

LOS ANGELES, CALIFORNIA – OCTOBER 24: Larry Ellison attends the Rebels With A Cause Gala 2019 at Lawrence J Ellison Institute for Transformative Medicine of USC on October 24, 2019 in Los Angeles, California. (Photo by Phillip Faraone/Getty Images)

Ellison clarified that the 100 new data centers encompass both Oracle Cloud regions and deployments within Microsoft’s facilities. Oracle plans to launch in 20 Microsoft data centers, totaling over 2,000 racks, to deliver Oracle services through Azure.

Highlighting international demand, Ellison noted that various nation-states, including Japan, Italy, Saudi Arabia, Bangladesh, and New Zealand, have placed orders for sovereign data centers within their borders.

Significantly, xAI, Elon Musk’s AI venture, emerged as a notable Oracle customer, particularly for Nvidia GPUs. Oracle supplied sufficient GPUs for xAI’s large language model, Grok, with ongoing demand for additional resources.
Financially, Oracle reported robust performance, with total revenues reaching $12.9 billion for the quarter, reflecting a five percent year-on-year increase. Cloud revenue, encompassing Infrastructure as a Service (IaaS) and Software as a Service (SaaS), amounted to $4.8 billion, marking a 25 percent increase. Cloud infrastructure (IaaS) revenue saw a notable surge of 52 percent to $1.6 billion. However, cloud license and on-premise license revenues experienced an 18 percent decline to $1.2 billion.

In the broader context, Catz highlighted that Oracle’s cloud businesses are approaching a $20 billion annual revenue run rate, showcasing continued unprecedented growth in cloud services demand. Overall, Oracle’s financial performance in Q2 2024 demonstrates positive momentum and a strong outlook for their cloud business.

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