Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Investors Business Daily
Investors Business Daily
Technology
RYAN DEFFENBAUGH

Oracle Stock Jumps On Report of $10 Billion Cloud Deal With Musk's AI Startup

Elon Musk's artificial intelligence startup xAI is in talks with Oracle on a multiyear, $10 billion cloud-computing deal, The Information reported Tuesday. Oracle stock jumped on the news.

Musk's xAI startup would become one of Oracle's largest customers, according to the report. The Information cited a person involved in the talks. The year-old xAI hopes to challenge OpenAI as a developer of large language models that power generative AI tools.

On the stock market today, Oracle stock is up more than 3% at 119.89. Shares jumped as high as 122 following the news before easing back slightly. 

Oracle Stock: Cloud Push

The deal would mark a win for the Oracle Cloud Infrastructure business, which is competing against industry heavyweights Amazon and Microsoft. Analysts see the offering as a potential growth driver for Oracle as companies adopt generative AI, which requires massive data and computing power. Oracle's stock took a hit late last year as sales growth slowed for the business.

But shares bounced back after a strong February-quarter report, in which Oracle said cloud infrastructure  revenue increased 49% year over year to $1.9 billion.

Musk's startup and Oracle have worked together before. In December, Oracle Chairman Larry Ellison said the company provided high-powered computing chips from Nvidia to support xAI.

"We gave them quite a few," Ellison said on an analyst call. "But they wanted more, and we are in the process of getting them more."

Meanwhile, xAi is in talks to raise up to $6 billion in equity funding, according to a report from Bloomberg in late April.

Oracle did not immediately return a request for comment on The Information's report.

If Tuesday's gains hold, Oracle stock will be ahead 14% this year, compared to a 9.4% gain for the S&P 500.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.