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Oracle (ORCL) Helps Reka Power Generative AI Innovation

Oracle ORCL announced that Reka, an artificial intelligence (AI) research and product company, has selected Oracle Cloud Infrastructure (“OCI”) to drive the latter’s mission of advancing science and building cutting-edge generative AI models.

Through this collaboration, Reka will leverage OCI's powerful AI infrastructure, powered by NVIDIA GPUs, to train its state-of-the-art multimodal models supporting more than 20 languages. These models will then be made available to customers worldwide via the Oracle Cloud Marketplace.

OCI's CPU and GPU computing solutions allow enterprises to power a wide range of AI workloads, from generative AI and computer vision to natural language processing and recommendation engines. Oracle's AI-focused customer engineers collaborate closely with customers like Reka throughout their AI/ML deployment to help ensure success.

Founded by renowned scientists from DeepMind, Google Brain and FAIR, Reka has pioneered multimodal AI models that allow enterprises to develop generative AI applications using multilingual text, code, images and video data. These applications unlock new possibilities like generating creative concepts, finding answers to complex questions, deriving insights from data and building continually-learning AI agents for novel use cases.

Like other leading AI companies, Reka can build and train models faster and more reliably using OCI's purpose-built AI infrastructure and services. For large language model training, OCI Supercluster provides extreme scale with up to 4,096 bare metal instances harnessing 32,768 NVIDIA H100 Tensor Core GPUs interconnected with ultra-low latency RDMA networking and high-performance storage.

Reka's Core and Flash model offerings will be made available to Oracle’s customers via private listings on the Oracle Cloud Marketplace.

Oracle Corporation Price and Consensus

Oracle Corporation Price and Consensus
Oracle Corporation Price and Consensus

Oracle Corporation price-consensus-chart | Oracle Corporation Quote

Oracle Ramps Up AI & Cloud Investments, Unveils New Offerings

The partnership with Reka signals Oracle's strategy to position OCI as a leading cloud platform for developing and deploying generative AI solutions for enterprises across industries.

Oracle has announced plans to invest more than $8 billion in the next decade to meet the growing demand for cloud computing and AI infrastructure in Japan. This strategic move aims to expand the presence of OCI throughout the country.

In a significant development, Oracle's Financial Services division has introduced its Financial Services Compliance Agent, an AI-powered cloud service that enables banks to run inexpensive and hypothetical scenario testing to adjust transaction monitoring thresholds and controls. This solution allows banks to more effectively identify suspicious activity and meet anti-money laundering compliance requirements.

Oracle and its subsidiary, NetSuite, are ramping up their AI offerings, positioning the tech giant to drive growth in its cloud services and license revenues. The company recently teamed up with Palantir Technologies PLTR to offer secure cloud and AI solutions to businesses and governments worldwide. This partnership combines Oracle's distributed cloud and AI infrastructure with Palantir's advanced AI platforms, enabling organizations to better leverage their data, enhance efficiency, meet sovereignty requirements and stay ahead of adversaries.

Oracle's recent AI advancements span solutions like NetSuite's Analytics Warehouse Multi-Instance Connector, Text Enhance and Oracle Fusion Data Intelligence.

Furthermore, NetSuite is expanding its generative AI capabilities with Text Enhance, leveraging the company’s data to generate personalized content, boosting productivity, reducing errors, ensuring consistency and expediting business processes across finance, supply chain, sales and customer support.

Oracle is also introducing new AI features in Oracle Fusion Data Intelligence, harnessing OCI services like Oracle Autonomous Database and OCI Data Lake. This solution combines data-driven insights with intelligent actions, aiming to enhance decision-making processes and improve business outcomes.

These AI advancements are expected to bolster Oracle's cloud services and license revenues in the upcoming quarters. The Zacks Consensus Estimate for Oracle's fiscal 2024 cloud services and license revenues is pegged at $44.87 billion, indicating year-over-year growth of 26.7%. The consensus estimate for 2024 earnings is pegged at $5.58 per share, indicating an increase of 8.98% year over year.

Shares of this Zacks Rank #3 (Hold) company have gained 10% year to date compared with the Zacks Computer and Technology sector's 7.2% growth, attributed to the company's AI-driven innovations enhancing user experiences. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

According to a Mordor Intelligence report, the cloud AI market size is estimated to reach $274.54 billion by 2029 from $67.56 billion in 2024, witnessing a CAGR of 32.37%. However, Oracle faces competition from industry giants like SAP SAP and Microsoft MSFT in the cloud AI market. To maintain its competitive edge, Oracle is leveraging its collaboration with MSFT to expand Oracle Database’s availability on Azure, fostering a healthy competitive landscape.

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