*

Oracle's cloud deals boost Ellison's fortune to $371.7

billion,

second only to Musk

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Ellison's Paramount potentially bidding for Warner Bros

Discovery ( WBD ) and could reshape Hollywood landscape

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Oracle's AI strategy relies on Nvidia ( NVDA ) chips, avoiding

custom

chip competition

By Stephen Nellis and Akash Sriram

SAN FRANCISCO, Sept 12 (Reuters) - Fortune magazine

wondered on its cover whether Oracle co-founder Larry Ellison

might become the world's richest person, while BusinessWeek

declared Ellison is "cool again," noting that "Silicon Valley's

bad boy is having his revenge."

Both were published 25 years ago, but they could've run this

week. The octogenarian Ellison is back in headlines after Oracle

announced a clutch of cloud computing deals that rocked the tech

world and sent its stock up 35.9%, putting Ellison's fortune

close to $400 billion, second globally only to Elon Musk.

Then on Thursday, news broke that Paramount, the media

conglomerate Ellison's family now controls, is preparing a bid

to buy out the storied Warner Bros Discovery ( WBD ), threatening

overnight to dominate Hollywood and culture.

The swashbuckling billionaire may have been known more for

his yacht collection, his ownership of a Hawaiian island or his

longstanding support of Donald Trump.

More recently, with little fanfare, he has plotted his way

back to the center of power. At Paramount, his son David appears

to be tilting CBS News toward the right, tapping Trump supporter

and former CEO of conservative think tank Hudson Institute

Kenneth Weinstein as ombudsman for CBS News. He also is

reportedly considering The Free Press's Bari Weiss for a

leadership role at the news organization.

Ellison has also got his hands on TikTok. In 2022, Oracle

began providing U.S. tech infrastructure to the short

video-sharing platform after national security questions arose

over the Chinese-owned service used by over 170 million

Americans.

Some probably have forgotten that Ellison's brash tactics

and lavish lifestyles earned him the role of bad boy of Silicon

Valley since he co-founded Oracle in 1977.

In 2010, he played himself in "Iron Man 2." Remarkably,

Ellison has honed a reputation as an uber tech titan and playboy

while tackling decidedly unsexy, vexingly hard computing

challenges. Recently, he helped figure out how to string

together thousands of computers to run artificial intelligence

systems.

Massive, AI-level money was more elusive until the latest

quarter, when the cloud deals juiced Oracle's stock price.

Oracle vanquished database rivals in the 1990s, then missed

nearly a decade of the sales and stock market gains from the

wholesale shift of business applications to the cloud.

While AI shows tremendous promise for Oracle, success is

far from certain, given that the entire industry is still

working on a profitable business model. Also, Oracle has tied

itself particularly closely to a single company -- OpenAI,

which, according to a person familiar with the matter, is

committed to paying Oracle $300 billion for computing resources

over five years.

DON'T COMPETE WITH NVIDIA

Oracle became an AI landlord, courting marquee customers

including Meta and Elon Musk's xAI in addition to its new

biggest client, OpenAI. That shift has helped booked revenue

surge more than four-fold to $455 billion.

"People have definitely questioned him over the years," said

Matthew Durot, deputy editor for wealth at Forbes, which

calculates his fortune. With Oracle's focus on AI, "He's sort of

got the last laugh - at least for now."

One key decision helped: Oracle chose not to build custom

AI chips like Microsoft ( MSFT ), Amazon ( AMZN ) and Google. The decision to

instead rely on Nvidia ( NVDA ) has likely helped it get more chips from

the global leader of AI processors, analysts said. Ellison

himself led the way.

At a dinner in 2024, Ellison took Musk and Nvidia ( NVDA ) CEO Jensen

Huang to Nobu, his Palo Alto sushi restaurant. "Please take our

money," Ellison said he told Huang. "It worked," Ellison added

in an earnings call with equity analysts.

Within several months of that sushi dinner, Oracle landed more

GPUs, closed a compute deal with OpenAI and announced a splashy

half a trillion dollars OpenAI computing project, Stargate.

Oracle's first cloud venture in 2016 ended in business

disaster but a second, launched in 2018, was a service that

proved cheaper and more flexible than other offerings.

In 2020, when Zoom Technologies ( ZTNO ) was buckling under a crush

of new traffic during the pandemic, it tapped Oracle's cloud and

its hiccups and outages all but vanished. In 2022, when TikTok

moved the data of more than 100 million U.S. users to Oracle's

cloud, the changeover went largely unnoticed by users. Analysts

called this a major technical feat.

HUGE RISKS REMAIN

Ellison is known for piling up injuries in extreme sports,

and Oracle's rush into AI shows a taste for risk.

The company does not buy land, build data centers or power

plants. It outsources all those functions to partners, who may

or may not come through, said Chirag Dekate, a vice president

and analyst at research firm Gartner. It also remains to be seen

whether partners such as OpenAI can amass the capital to pay

Oracle, since OpenAI is still building a business it hopes will

be profitable.

"When you have just one handful of customers, and one of

those customers goes away, you are left with a really large hole

that you now need to figure out how to fill," Dekate said.