I don’t think they can weather delays like this. I have family in Port Washington and visit there often. From what I’ve seen public opposition to this project is intense and growing. Every day this project is delayed is another day for local officials to find new ways to hinder it.
It must be disconcerting to be an Oracle customer right now - knowing your license fees are not going to lead to improved products or better support. Instead they’re financing some rickety datacenter building scheme.
Feels like Oracle outsourced all their datacenter construction to organizations that were not nimble enough to line up contingency plans for alternative power sources and expected grid connections to happen "like normal".
Meta, OpenAI, Anthropic, SpaceX even Google have been more hands-on and haven't seen these power issues plaguing Oracle, probably because they have an actual internal A-teams on it, not lethargic contractors.
>Meta, OpenAI, Anthropic, SpaceX even Google have been more hands-on
and that changes the whole social/economics/political game. The companies can't rely on the society nor on the government for required services, be it power or even defense (like those attacked AWS datacenters in Middle East). Thus those companies are more and more vertically integrated - for example they all have their own nuclear power startups and at least 2 - AMZN and SPCX - already have their access to space. One can mentally extrapolate things further or just read say Karp's book "The Technological Republic".
My guess is that not meeting these commitments will actually help Oracle.
Oracle has been sitting on their heap of cash for a while now. They've had a lot of locked-in customers for a while. But as they started to bleed customers they looked for new revenue streams. I think the lawsuits filled that niche for a while
Eventually transforming themselves into an AWS clone became the plan, and last year there were all sorts of deals announced. But a lot of those deals were basically expectations, and Oracle didn't have a lot of guarantees that they were going to get the spend. They probably figured they had the OpenAI business and if that didn't pan out then they could offer database services to their existing customers. But to get any hope of any of that they need to lay out the cash upfront, to build the data centers and fill them.
But their existing customers hate them. Nobody will switch to Oracle willingly, certainly not for any kind of hosting. And Oracle bonds are Rated at BBB-, one step above junk status, so nobody wants to lend them money. They're shedding employees as fast as they can because they can't raise cash.
Ultimately, I expect them to renege on their datacenter contracts. But I think that'll probably be fine, because nobody was really going to use them anyway. The penalties are probably minor and Oracle will walk away from this whole thing without any of the obligations, and with a much smaller workforce that costs far less to maintain.
And then they'll go back to their rent-seeking. My guess is that in 2 or 3 years you'll see Oracle try to do a bunch of acquisitions of the modern tech stack to try to regain relevance and re-capture some of their lost market, and then go back to their old rent-seeking behavior.
I hear MongoDB recently lost their CEO; bet that makes them a good chunk cheaper......
The penalties aren't minor, they're on the hook for the full amount even if deadlines slip. That's the tradeoff of the financial engineering hyperscalers use to move debt and capex to these SPVs. Otherwise the developers wouldn't be able to secure financing for these gigantic multi year projects built to spec for a single customer.
Such a crude take. How deep in the sand does your head have to be to think that HN is anti-ai because of jobs? AI topics are constantly on the front page and is a frequently discussed topic here. The US has 12x as many data centers as China with only a fourth of the population. There is so much more to the American hyperscaler roll out beyond replacing coders. Not to mention, there are very few reasons to be rooting for Oracle.
I'm not anti-AI because of jobs, I'm anti-AI because it fucking sucks at the things people claim it can do. It gets irritating seeing people fawn over the slop machine as if it were actually doing useful things rather than making software worse day by day.
I don’t think they can weather delays like this. I have family in Port Washington and visit there often. From what I’ve seen public opposition to this project is intense and growing. Every day this project is delayed is another day for local officials to find new ways to hinder it.
It must be disconcerting to be an Oracle customer right now - knowing your license fees are not going to lead to improved products or better support. Instead they’re financing some rickety datacenter building scheme.
As opposed to the previous times of being an Oracle customer where they cared about their users?
That's the point, nobody knows how this could get worse and they're going to find out.
hm, any product they have desperately need more ui to be better. There is an entire ecosystem exists due to their slowness to apply that.
Feels like Oracle outsourced all their datacenter construction to organizations that were not nimble enough to line up contingency plans for alternative power sources and expected grid connections to happen "like normal".
Meta, OpenAI, Anthropic, SpaceX even Google have been more hands-on and haven't seen these power issues plaguing Oracle, probably because they have an actual internal A-teams on it, not lethargic contractors.
Most of those names have also used neoclouds and arms length SPVs to avoid adding more capex to their balance sheets in recent years.
>Meta, OpenAI, Anthropic, SpaceX even Google have been more hands-on
and that changes the whole social/economics/political game. The companies can't rely on the society nor on the government for required services, be it power or even defense (like those attacked AWS datacenters in Middle East). Thus those companies are more and more vertically integrated - for example they all have their own nuclear power startups and at least 2 - AMZN and SPCX - already have their access to space. One can mentally extrapolate things further or just read say Karp's book "The Technological Republic".
If Oracle can't meet these commitments, what is the likelihood that they go bankrupt? (This may be a lot of wishful thinking on my part, I admit.)
My guess is that not meeting these commitments will actually help Oracle.
Oracle has been sitting on their heap of cash for a while now. They've had a lot of locked-in customers for a while. But as they started to bleed customers they looked for new revenue streams. I think the lawsuits filled that niche for a while
Eventually transforming themselves into an AWS clone became the plan, and last year there were all sorts of deals announced. But a lot of those deals were basically expectations, and Oracle didn't have a lot of guarantees that they were going to get the spend. They probably figured they had the OpenAI business and if that didn't pan out then they could offer database services to their existing customers. But to get any hope of any of that they need to lay out the cash upfront, to build the data centers and fill them.
But their existing customers hate them. Nobody will switch to Oracle willingly, certainly not for any kind of hosting. And Oracle bonds are Rated at BBB-, one step above junk status, so nobody wants to lend them money. They're shedding employees as fast as they can because they can't raise cash.
Ultimately, I expect them to renege on their datacenter contracts. But I think that'll probably be fine, because nobody was really going to use them anyway. The penalties are probably minor and Oracle will walk away from this whole thing without any of the obligations, and with a much smaller workforce that costs far less to maintain.
And then they'll go back to their rent-seeking. My guess is that in 2 or 3 years you'll see Oracle try to do a bunch of acquisitions of the modern tech stack to try to regain relevance and re-capture some of their lost market, and then go back to their old rent-seeking behavior.
I hear MongoDB recently lost their CEO; bet that makes them a good chunk cheaper......
The penalties aren't minor, they're on the hook for the full amount even if deadlines slip. That's the tradeoff of the financial engineering hyperscalers use to move debt and capex to these SPVs. Otherwise the developers wouldn't be able to secure financing for these gigantic multi year projects built to spec for a single customer.
In a normal world? Close to 100%. But we're not in a normal world so the probability of a government intervention is high.
Unlikely. Sorry to burst your bubble.
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Can Trump step in? I think that Ellison might make such a request. Quid pro quo given the favourable coverage CBS is giving Trump.
Would that do anything beside losing more political capital from voters?
funny that you think he care about political capital
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Speak for yourself, I love this story because I'm proudly anti-Oracle. Can't wait for the Ellisons to lose their shirts.
I don't think we read the same HN. The home page is 25% devoted to AI most of the time and not in a negative way.
Are you a bot? Because your post history looks an awful lot like you're a bot.
Good grief, that username is apropos.
Username is adequate.
Such a crude take. How deep in the sand does your head have to be to think that HN is anti-ai because of jobs? AI topics are constantly on the front page and is a frequently discussed topic here. The US has 12x as many data centers as China with only a fourth of the population. There is so much more to the American hyperscaler roll out beyond replacing coders. Not to mention, there are very few reasons to be rooting for Oracle.
I'm not anti-AI because of jobs, I'm anti-AI because it fucking sucks at the things people claim it can do. It gets irritating seeing people fawn over the slop machine as if it were actually doing useful things rather than making software worse day by day.