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Is Oracle’s AI and its Partnership with Cohere the Golden Ticket to Untold Riches?

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A Partnership between Oracle and Cohere for Generative AI Services ($ORCL)

Oracle has recently announced a partnership with and investment in Cohere, a provider of generative AI services. Oracle intends to leverage its solutions to integrate new generative AI features across its portfolio, from applications to infrastructure, as part of this partnership.Cohere will use generative AI models to generate text for product descriptions, blog posts, and other forms of content. The goal of these generative AI experiences is to assist organisations in automating their end-to-end business processes and providing customers with insights at the point of need, thereby augmenting decision-making and customer experiences.

Oracle will create a private, secure, and scalable environment for AI service delivery, which is a significant aspect of the partnership. This ensures that no data or insights will be transferred outside of the Oracle infrastructure, protecting the privacy of companies whose data is being analysed. Oracle’s generative AI solutions will not cross customer data borders and will provide tools to explain how the AI arrived at its decisions and what data was accessed.

Oracle’s investment in Cohere is strategic as well as pecuniary. Cohere will leverage Oracle Cloud Infrastructure (OCI) as a result of the partnership, which suggests that Oracle could potentially see a substantial return on its investment. Oracle stands to gain greatly if Cohere obtains market share from solutions such as OpenAI and Google. In addition, the success of this venture will likely increase OCI usage, and Oracle will benefit further by integrating Cohere’s services throughout its portfolio.

Incorporation of Generative AI Services within Oracle Solutions ($ORCL)

Oracle intends to incorporate generative AI services into all of its applications, including Oracle Fusion Applications, Oracle NetSuite, and other Oracle industry-specific applications. The objective is to enable clients to rapidly deploy generative AI solutions to address their “most pressing business challenges”.

Oracle’s database solutions, such as Oracle Database and MySQL HeatWave, will also provide access to these generative AI services. Specific services and use cases are still being developed, but the potential is enormous. In addition, Oracle intends to incorporate these new generative AI solutions into its cloud offerings, allowing firms that retain infrastructure to take advantage of the new capabilities without compromising data security or privacy.

Customers have responded enthusiastically to the change. Senior Director at Uber, Kamran Zargahi, characterised “Generative AI” as an incredible opportunity to support their business, delight their customers, and increase productivity. Similarly, Co-op’s Domain Principal—HCM Business Platforms, Gareth Abreu, predicted that the use of generative AI in HCM applications will be a game-changer for businesses.

The Role of Cohere in the Partnership with Oracle ($ORCL)

The platform of Cohere is designed to allow businesses to tailor models to their specific requirements. It provides a variety of language models, ranging from those suited for edge devices to those suited for highly complex duties. All data is analysed in secure containers to assure security.

In conclusion, Oracle’s partnership with Cohere represents a significant advance in the company’s artificial intelligence (AI) strategy. Oracle is positioning itself to assist businesses in achieving new levels of automation, efficiency, and customer contentment through the incorporation of generative AI services into its offerings.


Key Growth Drivers: Oracle ($ORCL)

  1. Accelerated Growth in Cloud Revenue
Inome Statement Item Q4 2023 (USD M) Q4 2022 (USD M) % Change
Total Revenue 13,800 11,800 17%
Cloud Revenue 4,400 2,900 54%
– Cloud Infrastructure (IaaS) 1,400 800 76%
– Cloud Application (SaaS) 3,000 2,100 45%
– Fusion Cloud ERP (SaaS) 700 600 26%
– NetSuite Cloud ERP (SaaS) 700 600 22%
GAAP Operating Income 4,100 4,500 -8%
GAAP Net Income 3,300 3,200 4%


Oracle’s cloud revenue, which includes Infrastructure as a Service (IaaS) and Software as a Service (SaaS), stood at $4.4 billion for the fourth quarter, up by 54% in USD and 55% in constant currency. The Cloud Infrastructure (IaaS) revenue was $1.4 billion, up 76% in USD and 77% in constant currency, while the Cloud Application (SaaS) revenue was $3.0 billion, up 45% in USD and 47% in constant currency. This growth in cloud revenue is a clear indication of Oracle’s successful strategic focus on cloud services.

  1. Success of Oracle’s Gen2 Cloud

Oracle’s Gen2 Cloud has quickly become the number 1 choice for running Generative AI workloads. This success is due to Oracle’s high-performance, low-cost GPU cluster technology. The fact that NVIDIA, a leading company in AI technology, is using Oracle’s clusters for their AI infrastructure further validates the success of Oracle’s Gen2 Cloud.

  1. Strong Financial Performance

Oracle’s total revenue for the fiscal year 2023 reached an all-time high of $50 billion. This strong financial performance is a testament to the company’s effective business strategies and operational efficiency.

  1. Dividend Announcement

The board of directors declared a quarterly cash dividend of $0.40 per share of outstanding common stock. This announcement is likely to make the company’s stock more attractive to investors seeking regular income.

  1. Accelerating Growth Rates

Both of Oracle’s strategic cloud businesses, IaaS and SaaS, have seen accelerating growth rates. This trend suggests that these segments will continue to be significant contributors to the company’s revenue in the future.


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