The Morning Download: Oracle's AI Future, Foretold

Good morning. True to its name, Oracle has been able to anticipate where demand for technology was headed, and invest in that future. Time and again, the company saw the road ahead with clarity and acted with conviction, defying skeptics who doubted that its capital spending would pay off. That’s strong leadership.

That effort has unfolded in stages, beginning with its early investments in cloud computing, followed by its more recent push into AI data centers and infrastructure. Yesterday, the company’s shares rose nearly 10% in extended trading after the company announced quarterly results that reflected strong growth on both fronts. As Bloomberg reports:

• Revenue in Oracle’s infrastructure business increased 84% to $4.9 billion in the period ended Feb. 28, and total revenue will reach $90 billion in the fiscal year beginning in June.
• The company is working to deliver on massive cloud infrastructure contracts with customers like OpenAI and Meta Platforms, and said the demand for cloud computing for AI training and inferencing continues to grow faster than supply.

Oracle is reshaping its workforce and internal operations in anticipation of AI’s growing impact, too. From The Wall Street Journal:

Internally, Oracle is adopting AI coding tools, which are helping make its software-as-a-service business run more efficiently. It is using AI to build new SaaS products and embed agents into existing applications, co-Chief Executive Mike Sicilia said.

The move is making it more efficient to build software with fewer people, and Oracle has shrunk its product development teams as a result. Oracle spent $153 million on restructuring costs in the quarter, which included severance expenses.

Sicilia on the call also addressed concerns about AI replacing SaaS companies, which make up a significant portion of Oracle’s business. Shares of software stocks took a beating in February because investors were worried AI would deem SaaS companies obsolete.

“Some smaller or single-focused SaaS players may well be disrupted,” Sicilia said. “But Oracle will not be among them.”

The question for leaders of all companies is the extent to which Oracle has foretold the AI-driven future of their companies, as well as its own. Given that those companies are Oracle’s customer base, its job is to understand their direction. The prophecy is exponential demand for AI, across the economy.

Correction: Bloomberg reported that Oracle’s infrastructure business increased 84% to $4.9 billion. An earlier version of this newsletter incorrectly attributed the Bloomberg report to Barron's.

Big Tech is getting its claws into agents. Nvidia is planning to release its own open-source AI agent platform targeting enterprise customers, Wired reports. Called NemoClaw, the tool will include built-in security and privacy features, addressing concerns that have slowed AI agent adoption in corporate settings. The announcement taps into growing excitement around "claws," a class of locally-run, open-source AI agents gaining traction in the developer community.

Meanwhile... Moltbook, the viral social network created to host OpenClaw agents, has been acquired by Meta Platforms for an undisclosed amount. The tech giant said Tuesday the Moltbook team will join its Superintelligence Labs division, known as MSL.

The Anthropic/Pentagon saga continues. A day after Anthropic sued the Pentagon over its designation as a national security supply risk, the Department of Defense announced a new agreement with rival Google. The deal gives DoD employees access to Gemini's Agent Designer, a tool that lets users build custom AI agents using natural language, Bloomberg reports. Emil Michael, the under secretary of defense for research and engineering, said the agents will initially be limited to unclassified networks.

And Microsoft in a Tuesday filing in U.S. District Court in San Francisco backed Anthropic's push for a temporary restraining order against the Pentagon's supply chain risk designation, warning that without one, tech companies would need to "act immediately to alter" product and contract configurations used by the Defense Department, CNBC reports. In November, Microsoft along with Nvidia announced plans to invest up to $15 billion in Anthropic.

Nvidia backs Mira Murati's AI startup. Nvidia is investing in Mira Murati's Thinking Machines Lab as part of a multiyear partnership in which the startup will deploy at least one gigawatt of Nvidia chips to train and serve its frontier AI models, the WSJ reports. The deal also includes a collaboration to design AI training and inference systems using Nvidia technology, though the size and terms of the investment weren't disclosed.

Murati, the former OpenAI CTO, has been competing aggressively for AI research talent as valuations across the industry have skyrocketed. Her company has grown from roughly 30 employees a year ago to about 120 today.

Amazon blames use of AI coding tools for outage surge. Amazon held an internal engineering meeting Tuesday to address a surge of recent outages, some of which were linked to AI coding tools, according to the FT. A briefing document seen by the FT cited "gen-AI assisted changes" as a contributing factor in a growing "trend of incidents." The note also said that junior and mid-level engineers would need sign-off from senior colleagues before deploying any AI-assisted code changes.

The episode underscores a challenge facing every major tech organization deploying AI at scale: the need to establish guardrails before productivity gains come at the cost of reliability.

Bonds are big now. Amazon and Salesforce are both tapping the U.S. bond market in a big way, Bloomberg reports. Amazon has drawn roughly $126 billion in peak demand for its ongoing bond sale, a sign of strong investor appetite for hyperscaler debt. Meanwhile, Salesforce is preparing its largest-ever note offering, targeting between $20 billion and $25 billion, with proceeds earmarked for a share buyback.

Cyber Command gets a leader. The Senate confirmed Gen. Joshua Rudd on Tuesday to lead both U.S. Cyber Command and the NSA, Politico reports. The vote filled a vacancy left since President Trump fired Gen. Timothy Haugh last April.

The International Energy Agency has proposed the largest release of oil reserves in its history to bring down crude prices that have soared during the U.S.-Israel war with Iran, officials familiar with the matter said. (WSJ)

Iran is exporting more oil through the Strait of Hormuz than before the war, showing it is in control of a strategic waterway that it has closed off to the rest of the region’s oil producers. (WSJ)

BlackRock is committing $100 million of grant capital to fund and expand training programs in the skilled trades, including plumbers and electricians. (WSJ)

Miami Heat center Bam Adebayo on Tuesday night scored 83 points against the Washington Wizards, the second-highest scoring performance in NBA history. (WSJ)

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The WSJ CIO Journal Team is Steven Rosenbush, Isabelle Bousquette and Belle Lin.

The editor, Tom Loftus, can be reached at thomas.loftus@wsj.com.