Oracle’s stock soared nearly 9% on Wednesday, propelled by surging demand for its cost-effective cloud infrastructure services, particularly from AI applications. The surge could boost the company’s market valuation by over $28 billion, adding to its current $340 billion valuation. With an 18% increase in shares since the beginning of the year, Oracle is capitalising on the momentum of its cloud infrastructure unit, which offers computing and storage services to businesses at competitive prices, positioning itself against major rivals like Google, Microsoft, and Amazon.
Oracle’s cloud infrastructure has garnered attention from AI startups, including Elon Musk’s xAI, thanks to its affordability compared to competitors. In a strategic move, Oracle recently announced partnerships with ChatGPT-maker OpenAI and Google Cloud to expand its cloud infrastructure offerings. That collaboration strengthens Oracle’s position as an AI platform and extends its database services distribution, as Evercore analyst Kirk Materne highlighted.
While Oracle’s forward earnings estimates stand at 19.59 times, lower than those of its major competitors, its fourth-quarter results missed expectations. Due to increasing competition from more cost-effective alternatives, the company faces challenges in its legacy database and enterprise resource planning (ERP) software business. Morningstar analyst Julie Sharma suggests that Oracle may experience customer churn as businesses undergo significant digital transformations, opting for cheaper database and ERP solutions over Oracle’s offerings.
At Apple’s annual developer conference on Monday, the tech giant is anticipated to unveil how it’s integrating AI across its software suite. The integration includes updates to its Siri voice assistant and a potential collaboration with OpenAI, the owner of ChatGPT. With its reputation on the line, Apple aims to reassure investors that it remains competitive in the AI landscape, especially against rivals like Microsoft.
Apple faces the challenge of demonstrating the value of AI to its vast user base, many of whom are not tech enthusiasts. Analysts suggest that Apple needs to showcase how AI can enhance user experiences, a shift from its previous emphasis on enterprise applications. Despite using AI behind the scenes for years, Apple has been reserved in highlighting its role in device functionality, unlike Microsoft’s more vocal approach with OpenAI.
The spotlight is on Siri’s makeover, which is expected to enable more seamless control over various apps. Apple aims to make Siri smarter by integrating generative AI, potentially through a partnership with OpenAI. The move is anticipated to improve user interactions with Siri across different apps, enhancing its usability and effectiveness. Also, Apple recently introduced an AI-focused chip in its latest iPad Pro models, signalling its commitment to AI development. Analysts predict that Apple will provide developers with insights into leveraging these capabilities to support AI computing. Additionally, reports suggest Apple may discuss its plans for using its chips in data centres, which could enhance cloud computing capabilities while maintaining privacy and security features.
The Apple Worldwide Developers Conference (WWDC 2024) will run until Friday, offering developers insights into app updates and new tools. Investors are hopeful that Apple’s AI advancements will drive sales of new iPhones and boost the company’s competitive edge amid fierce global competition.
China’s ByteDance, the parent company of TikTok, plans to invest around $2.13 billion to establish an AI hub in Malaysia. The plan includes an additional $320 million to expand data centre facilities in Johor state, according to Malaysia’s Trade Minister Tengku Zafrul Aziz.
The development follows significant investments by other tech giants in Malaysia. Google recently announced a $2 billion investment to create its first data centre and Google Cloud region in the country, while Microsoft is set to invest $2.2 billion to enhance cloud and AI services.
The investment is expected to boost Malaysia’s digital economy, aiming to increase its contribution to 22.6% of its GDP by 2025, underscoring the county’s growing importance as a digital economy hub in Southeast Asia.
According to European banking executives, the rise of AI is increasing banks’ reliance on major US tech firms, raising new risks for the financial industry. AI, already used in detecting fraud and money laundering, has gained significant attention following the launch of OpenAI’s ChatGPT in late 2022, with banks exploring more applications of generative AI.
At a fintech conference in Amsterdam, industry leaders expressed concerns about the heavy computational power needed for AI, which forces banks to depend on a few big tech providers. Bahadir Yilmaz, ING’s chief analytics officer, noted that this dependency on companies like Microsoft, Google, IBM, and Amazon poses one of the biggest risks, as it could lead to ‘vendor lock-in’ and limit banks’ flexibility. These facts also imply the strong impact AI could have on retail investor protection.
Britain has proposed regulations to manage financial firms’ reliance on external tech companies, reflecting concerns that issues with a single cloud provider could disrupt services across multiple financial institutions. Deutsche Bank’s technology strategy head, Joanne Hannaford, highlighted that accessing the necessary computational power for AI is feasible only through Big Tech.
The European Union’s securities watchdog recently emphasised that banks and investment firms must protect customers when using AI and maintain boardroom responsibility.
Alphabet’s Google announced the completion of its data centre and cloud facilities expansion in Singapore, marking a total investment of $5 billion in the nation’s technical infrastructure. This substantial investment underscores Google’s commitment to enhancing its services in Southeast Asia. The expanded data centres, which employ over 500 people, are crucial for powering essential services like Google Search and Maps.
In addition to its efforts in Singapore, Google revealed plans last week to invest $2 billion in Malaysia to establish its first data centre in the country. The expansion into Malaysia signifies Google’s broader strategy to bolster its presence and capabilities across Southeast Asia, aiming to support the growing demand for digital services and infrastructure.
Microsoft announced on Monday a significant investment of 33.7 billion Swedish crowns ($3.21 billion) to enhance its cloud and AI infrastructure in Sweden over the next two years. This investment marks the company’s largest commitment to Sweden to date and includes plans to train 250,000 individuals in AI skills, aiming to boost the country’s competitiveness in the tech sector. Microsoft Vice Chair and President Brad Smith emphasised that this initiative goes beyond technology, focusing on providing widespread access to essential tools and skills for Sweden’s people and economy.
As part of this investment, Microsoft plans to deploy 20,000 advanced graphics processing units (GPUs) across its data centre sites in Sandviken, Gavle, and Staffanstorp. These GPUs are designed to accelerate computer calculations, enhancing the efficiency and capability of AI applications. Smith was scheduled to meet with Swedish Prime Minister Ulf Kristersson in Stockholm to discuss the investment and its implications for the country’s tech landscape.
In addition to bolstering AI infrastructure in Sweden, Microsoft is committed to promoting AI adoption throughout the Nordic region, which includes Denmark, Finland, Iceland, and Norway. The strategic move underscores Microsoft’s dedication to fostering innovation and equipping the Nordic countries with the necessary resources to thrive in the evolving AI era.
Amazon’s cloud computing division, Amazon Web Services (AWS), is discussing with Italy about investing billions of euros in expanding its data centre operations within the country. That is part of AWS’s broader strategy to strengthen its cloud services across Europe. According to sources, the specifics of the investment, including its size and potential locations, are still under negotiation. One option being considered is expanding AWS’s existing site in Milan or establishing a new one.
AWS and Italy’s digital transition department declined to comment on the ongoing talks. AWS initially launched its first cloud region in Italy in 2020, committing to invest €2 billion by 2029. The company serves notable clients in Italy, including luxury carmaker Ferrari and insurer Assicurazioni Generali. This potential investment follows AWS’s recent announcement of a €15.7 billion investment in Spain’s Aragon region, indicating a significant upscaling from previous plans.
AWS’s expansion in Italy might not be as large as its Spanish investment, yet it is expected to be substantial. In addition to Italy and Spain, AWS is making significant investments across Europe, including a €7.8 billion commitment in Germany through 2040. AWS also enhances its infrastructure to cater to telecom clients, securing its first major customer in Telefonica Deutschland. These expansions come as corporate demand for cloud computing surges, driven by increasing interest in AI, prompting renewed growth in the global cloud infrastructure market.
The Japanese government is taking steps to tighten regulations on exporting advanced technologies, particularly those with potential military applications in countries like Russia and China. This strategic move comes amidst growing concerns in Japan about diversifying cutting-edge technologies for military purposes. The Ministry of Economy, Trade and Industry will require private firms to provide advance notification before exporting technologies such as quantum science to prevent their misuse in military endeavours.
Export controls will be expanded to cover cutting-edge technologies and non-cutting-edge fields that pose risks of being used in conventional weapons. The proposed amendment to the trade ministry ordinance will introduce penalties for violations, reinforcing existing regulations under the foreign exchange and foreign trade law. This includes strengthening the ‘catch-all regulation,’ which covers items not explicitly listed but deemed at risk of being diverted for weapons manufacturing.
Under the new regulations, firms exporting advanced technologies must notify the ministry of their intentions and undergo risk assessments. If concerns arise about the potential military diversion of the exported goods, permission from the ministry will be required. Furthermore, in response to evolving global security dynamics, even goods and technologies in fields not considered cutting-edge will be subject to approval if investigations suggest they could be repurposed for military use, as demonstrated by Russia’s recent actions in Ukraine.
To facilitate compliance, the ministry will provide firms with information on trading partners and regions posing risks related to military diversion. Additionally, clear criteria will be published to help firms assess the risk level of their transactions, reducing confusion and ensuring compliance with the law. These measures reflect Japan’s commitment to enhancing export controls and safeguarding the responsible transfer of advanced technologies in a rapidly evolving global security landscape.
China plans to operationalise a nationwide computing power network by next year, aiming to balance regional digital disparities and enhance capacity. The initiative, led by the National Data Administration (NDA), is a strategic response to President Xi Jinping’s call for digital advancement and innovation amid global competition.
Liu Liehong, the head of the NDA, at a recent conference assured efforts to enhance data infrastructure and hasten the development of the computing power network. The initiative will enhance data sharing and utilisation, maintaining equilibrium between public and commercial interests while fostering data-driven innovation. The need for rigorous regulation, including standardization of formats, security protocols, and clear data governance policies was further emphasised.
In addition, the launch of pilot projects for data labelling, essential for AI utilisation, was announced, setting the stage for AI advancements across sectors.
This initiative can be located at the backdrop of China’s ongoing technological race with the US, as China intends to boost its computing capacity, currently second only to the US, by 50% by 2025.
Amazon doubles down on AI investment, injecting an additional $2.75 billion into AI startup Anthropic, a move solidifying its position in the competitive AI landscape. With this infusion, Amazon’s total commitment to Anthropic reaches a staggering $4 billion, marking the e-commerce giant’s largest-ever venture investment. This strategic partnership underscores the escalating race among tech titans like Google, Microsoft, and Amazon to dominate the burgeoning AI sector.
Anthropic, backed by Amazon and venture capitalists, is poised to receive billions in capital and cloud computing services, potentially valuing the start-up at over $18 billion. Despite increasing regulatory scrutiny over Big Tech’s involvement with prominent AI start-ups, Amazon continues to bolster its collaboration with Anthropic, saying it would be Anthropic’s ‘primary cloud provider’ for key workloads which will run on Amazon Web Services.
Investing in Anthropic amplifies Amazon’s presence in AI and highlights the tech giant’s dedication to innovation through in-house AI chip development. Anthropic’s model, Claude 3, positioned as a formidable challenger to OpenAI’s dominance, demonstrates promising advancements in AI capabilities, outperforming industry benchmarks.
Why does it matter?
Venture capital investors are expected to funnel substantial funds into Anthropic, with commitments totalling at least $750 million in an upcoming funding round. This influx of capital, coupled with Anthropic’s cutting-edge AI models, signals a significant milestone in the evolution of AI technologies and their integration into various sectors.
