Oracle will build a gigawatt AI data center powered by small modular reactors

Oracle shares rose more than 10% on Tuesday following the release of its fiscal 2025 first-quarter report, which ended Aug. 31. The company’s revenue rose 7% from $12.5 billion a year earlier to $13.3 billion, with the consensus forecast of analysts polled by FactSet at $13.2 billion. Adjusted earnings per share (Non-GAAP) amounted to $1.39, with analysts forecasting $1 ,33.

Oracle’s revenue from cloud services (IaaS and SaaS) grew year-on-year by 21% to $5.6 billion. Revenue from licensing cloud products increased by 7% to $870 million, and revenue from the Cloud Infrastructure (IaaS) segment increased by 45% to $2 .2 billion. “As cloud services has become Oracle’s largest business, growth in both our operating income and earnings per share has accelerated,” Oracle CEO Safra Catz said in a press release. Net income (GAAP) of the company amounted to $2.9 billion, or $1.03 per share, compared to $2.4 billion, or $0.86 per share, a year earlier (an increase of 21%).

Katz also announced in the report that she had entered into an agreement with AWS to host the Oracle Database DBMS infrastructure. AWS is the largest cloud service provider by market share. In a separate press release announcing the deal, Chairman and Chief Technology Officer Larry Ellison said Oracle is seeing “tremendous demand” from customers to work with multiple cloud providers. Thus, Oracle was able to persuade all three key players in the cloud market to cooperate – previously similar deals were concluded with Google and Microsoft.

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«To meet this demand and give customers the choice and flexibility they need, Amazon and Oracle are seamlessly connecting AWS services with the latest Oracle Database technology, including Oracle Autonomous Database,” Ellison said. “By deploying Oracle Cloud infrastructure inside AWS data centers, we can provide customers with the best possible database and network performance,” he added.

Ellison said Oracle has 162 cloud data centers in operation and under construction around the world. The largest of them will have a capacity of 800 MW, which will accommodate multiple clusters of NVIDIA accelerators for training large-scale AI models. And the company really needs sites to host accelerators, since in the reporting quarter Oracle signed 42 additional contracts for cloud GPUs totaling $3 billion, but was unable to conclude a $10 billion deal with xAI.

However, this is not the limit and the company will “soon” begin construction of a data center with a capacity of more than 1 GW. One of those projects has already had a site selected and is in the design process, Ellison said. The data center will be powered by nuclear power, as Oracle has received approval for three small modular nuclear reactors (SMRs). Similar projects are being developed with the participation of Oklo, supported by OpenAI head Sam Altman. However, the latter is already eyeing thermonuclear energy. Microsoft, which has close ties to OpenAI, is also exploring SMR. Amazon didn’t overthink it and simply purchased a campus directly powered by a conventional nuclear power plant.

For the current fiscal quarter, the company expects adjusted non-GAAP earnings of $1.45 to $1.49 per share on year-over-year revenue growth of 7% to 9%. The consensus forecast among analysts surveyed by FactSet is for Oracle to report adjusted earnings of $1.48 per share.