Oracle Corporation (NYSE:ORCL) is reportedly leading the race to provide high-security cloud services to Japan. This move is crucial for secure intelligence sharing between Tokyo and its allies.
Oracle is ahead of tech giants such as Amazon Web Services of Amazon.com Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc.‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google in the bid to provide an “air-gapped” cloud service to Japan, reported the Financial Times on Wednesday.
The US has long pushed Japan to strengthen its cybersecurity defenses against Chinese hacking, with the need becoming more urgent as Washington seeks deeper US-Japan weapons co-production and stronger deterrence against China.
Japan has not yet made a final decision on the contract and could still divide the award among multiple providers. According to the publication, Tokyo may first build an air-gapped cloud for highly sensitive data before integrating commercial cloud technology for less-classified information.
U.S. Ambassador to Japan George Glass is leading a working group coordinating with Oracle, its competitors, and the Japanese government.
Oracle did not immediately respond to Benzinga’s request for comments
Oracle’s AI Bet Faces Test
After discussions with Washington and a March call between President Donald Trump and Prime Minister Sanae Takaichi, Japan chose a U.S.-based cloud computing provider. Oracle, founded by Larry Ellison, a prominent Trump ally, became the frontrunner by emphasizing the company’s stronger security features.
This development comes at a critical time for Oracle. The company’s stock experienced a significant plunge in June, marking its worst month since 1990, which erased $100 billion of Ellison’s fortune.
Oracle reported strong fiscal fourth-quarter results, with revenue rising 21% to $19.2 billion, cloud revenue surging 47%, and its contracted backlog reaching $638 billion. However, heavy AI infrastructure spending weighed on investor sentiment, as quarterly capex climbed to $16.49 billion and full-year capex soared 162% to $55.7 billion, pushing free cash flow to a negative $23.7 billion.
Meanwhile, on Tuesday, Oracle announced a new AI-native builder experience for Oracle AI Agent Studio for Fusion Applications, enabling customers and partners to build and deploy agentic applications within Oracle Fusion Cloud Applications. The platform supports no-code, low-code, and pro-code development, integrating with tools like Visual Studio Code, Git workflows, OpenAI Codex, and Claude Code.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
Read Also: Oracle Stock Flashes Oversold Signal as It Nears 52-Week Lows
