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Larry Ellison, co-founder of Oracle Corporation (NYSE:ORCL), has unveiled an ambitious plan to develop a data centre powered by three small nuclear reactors. This project aims to support Oracle's expansive artificial intelligence (AI) initiatives. According to Ellison, the reactors are expected to generate over a gigawatt of energy, which is adequate to power approximately 800,000 homes annually.
Ellison revealed that the location for this new data centre has been secured, and necessary permits for the reactors are already in place. However, the proposal encounters significant legal challenges in Australia, where nuclear power is currently banned. Despite this, there is ongoing debate within the country, with the Coalition proposing the construction of seven nuclear power plants, all to be publicly funded.
In contrast, Oracle’s venture will rely on private funding, raising questions about the financial feasibility of the project, particularly given the projected cost of US$100 billion for the AI-integrated data centre. Oracle's initiative is setting a high benchmark, leveraging nuclear power to enhance its data centre capabilities while addressing the growing demands of AI technologies.
The use of nuclear power for data centres is not unprecedented. For instance, Westinghouse Electric Company (part of the Brookfield Business Partners L.P. [BBU] portfolio) recently signed an agreement with UK-based Community Nuclear Power Limited for the deployment of four small modular reactors. Each reactor is projected to cost around US$1 billion, with operational timelines extending over the next decade.
Meanwhile, Oracle is making significant strides in integrating AI across its operations. The company is advancing its enterprise software, AI-powered infrastructure, and data management systems. Senior Vice President Mahesh Thiagarajan emphasized Oracle’s strategic focus on deploying thousands of localized data centres, in contrast to the hundreds planned by competitors. AI is also being harnessed for enhanced project risk analysis, utilizing models trained on historical data to refine future predictions.
Oracle's AI capabilities extend into various sectors, including healthcare. Australian clients, such as the Royal Flying Doctor Service, are utilizing Oracle’s AI-driven medical record systems to generate personalized aftercare recommendations and drug treatment plans. This integration demonstrates Oracle’s commitment to leveraging AI to improve healthcare outcomes and operational efficiencies.
Additionally, NetSuite Inc. (acquired by Oracle in 2016) is incorporating generative AI into its offerings. Co-founder and CEO Evan Goldberg highlighted how generative AI can automate tasks such as creating sales descriptions for online store items and email campaign promotions. This feature simplifies content creation by pre-configuring product details, prices, and features, reducing the manual effort required from users. Goldberg noted that customers will soon be able to customize AI operations on a field-by-field basis, enhancing the flexibility and utility of NetSuite’s software solutions.
In summary, Oracle’s plan to power its data centre with nuclear energy reflects its ambitious approach to harnessing AI and addressing energy demands. Despite legal and financial hurdles, the initiative showcases Oracle’s commitment to innovation and its role in shaping the future of data management and AI integration.
