Platformonomics TGIF is a weekly roll-up of links, comments on those links, and perhaps a little too much tugging on my favorite threads.
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Lots of database vampire and antitrust incoherence this week. No missive next week.
News
ClownWatch™: Oracle FY25 Q3
Database vampire, the x-axis of cloud CAPEX and most amazeballs company ever (to hear them tell it) Oracle reported Q3 earnings. Revenue growth was — wait for it — 6.4% (their much bigger competitors all grew at least twice as fast, but Oracle did beat out both fellow cloud clown IBM and inflation). The company missed on both revenue and profit expectations.
But future so most glorious. Again Oracle talked up faster growth out on the horizon and RPO (which for Oracle means selling capacity they don’t have) while downplaying current performance. They’re now hyping expected FY27 growth rates! We’ll see…
There was no Seemingly Unscripted Moment™ from Larry Ellison on the conference call. Alas. The small modular reactor incident may haunt them as everyone has accounced concrete nuclear plans except Oracle.
But most important: CAPEX. Oracle spent $5.86 billion in the quarter, a record high for the company, and are guiding to “around $16 billion” for FY26 which starts in June. They will make their CAPEX guidance for the fiscal year (after a bunch of CAPEX misses 90 days after guidance). Yay Oracle!
With that brief congratulatory interlude completed, lets put those numbers into context. Oracle still falls further and further behind the hyperCAPEX companies with every passing quarter.
AWS, Google and Microsoft’s incremental CAPEX spend in the last year each exceeded Oracle’s total spend in the last year (and Meta just missed being in that club). Those three companies spent more on CAPEX in 2024 than Oracle has spent cumulatively in its nearly 50 year existence. All four hyperCAPEX companies will spend more next quarter than Oracle has guided to for the next year. But sure, we can pretend like Oracle is somehow catching up.
Oracle is taking a lot more financial risk than our other contestants. Their debt grew by 10% to $88 billion in the last quarter. This quarter’s $5.86 billion in CAPEX just about wiped out their $5.9 billion in operating cash flow. And Oracle announced they’re increasing the dividend by 25% (Larry needs cash? See below). Softbank isn’t the only company betting on the rosiest of AI futures.
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Follow the CAPEX: Cloud Table Stakes 2024 Retrospective, Why Can’t Oracle Build Data Centers?, Oracle Still Can’t Build Data Centers, Oracle’s Data Center Difficulties, Oracle’s Data Center Difficulties: FY25 Q1, Oracle’s Data Center Difficulties: FY25 Q2,, Follow the CAPEX: The Clown Car Race Checkered Flag, ClownWatch™
Related:
Stargate: So Many Mouths to Feed
Abilene, Texas claims to host the world’s largest BBQ. Experience feeding multitudes will come in handy, with all the different companies taking credit for, and hoping to profit from, the new data center in town (this one data center gets more PR than all other data centers combined, perhaps because there so many interested parties each trying to make their narrow slice seem bigger than it).
Lancium owns the “data center campus”. Crusoe has leased property, is the general contractor, and owns the data center (a co-lo basically). Oracle is leasing the data center and populating it with servers. Open AI will pay to train its models on Oracle’s infrastructure. And Softbank is promising to rain cash down on everyone involved (along with a variety of other financial investors).
This horizontal structure stands in marked contrast with the vertically integrated hyperscaler approach. Who gets margin and who doesn’t? Are there Coasian coordination costs? I’m too lazy to label all the layers, but you get the idea.
Tik Tok, Swamp Creature
Vague, but incredibly disappointing if true on two fronts. It seems the CCP would retain control (never mind that divest-or-ban law passed by a bipartisan Congress, signed by the president and upheld unanimously by the Supreme Court). And it is another data point for the argument we’re turning into an oligarchy. I await an emergency khakiocracy podcast explaining why actually this is fine for the rule of law and really good even for Little Tech!
The Oracle dilemma of both needing to retain its existing Tik Tok revenue but not having nearly the cash to purchase Tik Tok may lead us to this worst of all worlds outcome, if Oracle is at the top of the oligarchic pecking order for this issue. It isn’t clear whether the Tik Tok interest beyond hosting is an Oracle thing or Ellison family thing (Larry and son Bronny, who runs Paramount) thing. The Oracle dividend increasing to put $2 billion a year into Larry’s pocket might tell us something.
Question for legal scholars: what kind of standing do you need to sue the likes of Akamai, Apple, Google and/or Oracle for being in violation of the Protecting Americans from Foreign Adversary Controlled Applications Act by helping Tik Tok? Let me know (responses will be kept anonymous).
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Spending Larry’s Money, “Bronny” Ellison Named Chairman, CEO of Paramount, “Bronny” Ellison Beats “Bronny” Bronfman, David “Bronny” Ellison buys Paramount, Welcome to the Khakiocracy, Tik Tok on the Clock, Cantwell Recants?, Tik Tok Traitors: Maria Cantwell (Continued), Tik Tok Traitors: Maria Cantwell, Tik Tok’s Call to Arms: Useful Idiots, Fellow Travelers, Registered and Unregistered Foreign Agents Unite!, Contact Your Senators
Going Nuclear: Yay Nuclear Edition
Not sure whether there is any actual substance to this, but I like the sentiment. Some players are insufficiently sentimental:
Microsoft and Apple, which also use significant amounts of energy and have committed to reducing their carbon footprint, did not sign the statement.
Amazon has come far since “No Team at Amazon is Working on Nuclear Power“:
Amazon said it had invested more than $1bn in the nuclear industry in the past year and that speeding up new power stations would be “critical” for US security, meeting growing energy demands and helping combat climate change.
And yes nuclear is an investment for the 2030s. But the wait times for gas turbines are into that decade as well. There are no quick energy fixes.
John Ketchum, chief executive of NextEra Energy, which operates one of the largest nuclear power fleets in the US, told the Financial Times that new nuclear power would take until “2035 or later”, noting that “we still have to develop the first of a kind advanced nuclear unit that works”.
Brian Savoy, chief financial officer of utility Duke Energy, said after his company’s earnings last month that it did not expect SMRs to play a meaningful role until the late 2030s.
Previous:
Cloud Power Up, Introducing the Platformonomics Cloud Reactor Tracker, The Moore’s Law of Energy, Meta Goes Nuclear, Navigating Nuclear Obstacles: The Utilities, Navigating Nuclear Obstacles: The Bees, The Nuclear Call to Action, Nuclear: To SMR or Not to SMR?, Nuclear: To PPA or Not to PPA?, Starting to think my nuclear power cheerleading work is done…, Yay Google: Nuclear Edition!, It’s Time to Build: Energy Edition, An Even More Nuclear-Powered Cloud, The Nuclear Power Vibe Shift Continues, Not That Kind of Nuclear Cloud, Better Late Than Never, Power Crunch, Behold the Nuclear Cloud, Nuclear Powered Cloud Data Centers Are Happening, A Nuclear-Powered Cloud, When Nuclear-Powered Data Centers?
Antitrust Incoherence: iRobot Elegy Edition
Take a victory lap Lina Khan and the EU! Yay competition!
Antitrust Incoherence: Existential Amazon Questions Edition
Why are we here? Who are trying to protect? From whom? It is almost like antitrust needs a core set of consistently applied principles to help determine what is and is not anti-competitive behavior, as opposed to treating every company as a snowflake and making up the rules each time. Perhaps a doctrine?
And I would be remiss if I did not reiterate that Lina Khan made her name and got her FTC job by claiming Amazon’s prices were too low.
Antitrust Incoherence:Dodging DOGE Edition
Would love to see the internal FTC email thread from the hours between those two headlines.
Antitrust Incoherence: The Emerging Trump Doctrine?
The Biden administration antitrust doctrine of “Big Tech Bad!/Break Them Up!/All Acquisitions are Bad!” is starting to look coherent (or at least consistent) compared to the emerging Trump administration doctrine of “Assist Elon with his Vendettas” and/or “Antitrust is Just Another Source of Leverage”. This case is another example of Trump FTC continuity with Biden FTC policies and priorities, which I vaguely recall was not popular amongst the khakiocracy.
An antitrust doctrine provides clear lines on the field for all the players, and mitigates against arbitrary and inconsistent enforcement. After spending decades of climbing out of the abyss of arbitrariness, antitrust law is falling back into its primordial politicized swamp.
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Khakiocracy Status Check, Welcome to the Khakiocracy, A New Antitrust Doctrine, Antitrust Incoherence: The Consistently Incoherent Lina Khan, Antitrust Incoherence: New Administration, Continuity of Incoherence, Antitrust Incoherence: Google Breakup Rumors, Antitrust Incoherence: Breaking Up Google #monopolist, Antitrust Incoherence: Google Verdict,Antitrust Incoherence: Competitive Harassment Edition, Antitrust Incoherence: Don’t Forget Microsoft, Antitrust Incoherence: Isn’t Market Division Illegal?, Antitrust Incoherence: Roomba Aftermath Edition, Antitrust Incoherence: Apple Edition, Antitrust Incoherence: Spotify Edition, Antitrust Incoherence: Roomba Edition, The Incoherence Doctrine: The FTC Strikes Again, The DOJ Play at Home Game
Salesforce is (Still) Not a Technology Company
Why? Because Amway Saleforce is not a technology company. But super aggressive sales tactics? They’re world class!
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Salesforce Holds “Developer” Conference, Salesforce is Not a Technology Company: Nor an AI Company,
2025 Will Not be the Year of Agentic AI, The Agentic Abyss of Disillusionment, Salesforce is Not a Technology Company: Nor a Dogfood Company, What’s Bugging Marc Benioff – Continued, Benioff’s Blizzard of Bluster, Salesforce + Indian Mystic + AI = ???, “There’s an art to this kind of horseshit, and Benioff is its Michelangelo”, The Hard Thing About “Hard Pivots”, Thought Leadership (in Mascots), Salesforce Rallies Its Deep Bench of AI Experts (and Cartoon Characters), Bluster, Bombast and Bullshit: Just Another Day at Salesforce, Salesforce’s Shamelessness is Staggering, Salesforce Gonna Salesforce, The Spectacle that is Dreamforce
Prediction Victory Lap: Ireland Joins Enemies List
Never mind that the imbalances stem from Trump’s 2017 Tax Cuts and Jobs Act, which incentivized IP companies (particularly pharma and tech) to move their profits to Ireland. It is more tax avoidance than trade imbalance, but we’re long past such nuances. And there are few prizes for picking enemies from an infinite list.