Larry Ellison, chairman and chief technology officer of Oracle, speaks at the Oracle OpenWorld conference in San Francisco on September 16, 2019.
Justin Sullivan | Getty Images
Every technology company is talking about its opportunity in the field of artificial intelligence. Oracle is no exception. But during an earnings call in March, Oracle's Larry Ellison laid out a future market opportunity focused on a key customer that investors might think less about than Fortune 500 companies.
The Oracle founder, former CEO, current president and CTO sees national and state government applications running on platforms like Oracle Cloud Infrastructure to a much greater extent than they do today, and noted that this is starting to happen in several ways.
“We're talking about winning business with companies. For the first time, we're starting to win business with countries,” Ellison said. “We have a number of countries where we are negotiating sovereign zones with the national government.”
Big tech companies competing for huge government contracts in the cloud is nothing new. Microsoft and Amazon had a long battle over a cloud deal with the Department of Defense, and both the AI players as well as Oracle and Google ended up with a $9 billion contract with the Department of Defense in 2022.
But Ellison went further in his predictions when he spoke with analysts on the recent earnings announcement, saying: “Every government, almost every government, wants a sovereign cloud and a zone dedicated to that government.”
Oracle, which works with Nvidia and Microsoft on generative AI capabilities, has already helped use cloud technology to cut red tape in countries. One example given by Ellison is Albania. It is trying to climb into the EU with the help of chatGPT, where generative AI helps decipher and summarize its laws and help the country with what it needs to change in order to comply with EU regulations.
“It took Serbia eight years to harmonize its laws so it could join the European Union,” Ellison said. “Albania is facing the same thing, but with generative AI, we can read the entire set of Albanian laws and align their laws with the EU within probably 18 months to two years.”
Some analysts dispute Ellison's talk as anything more than a typical gathering of executives of a major business unit. Oracle shares are up about 21% year-to-date, but Barclays analyst Raimo Lenchu expressed concern about lower OCI growth during its recent earnings, which could “concern investors, because that's the main investment story.”
A version of the future featuring cloud services and AI-powered solutions could make government more efficient. For starters, redundancies are the government's focus, both in disaster and disaster recovery, Ellison said. But it is also moving into healthcare information and Internet access projects.
Countries, including Serbia, are working to standardize on Oracle Cloud Infrastructure and use generative AI for processes such as healthcare automation. Deals are being made to bring internet services in partnership with Elon Musk's Starlink to remote areas in Kenya and Rwanda, with OCI and Starlink mapping rural farms to see which crops are growing in which area, and whether they are getting enough nutrients such as nitrogen and water. .
“These maps are powered by artificial intelligence, and they help them plan their agricultural production, forecast their agricultural production, forecast markets, the logistics of agricultural production, and do all of these things as next-generation national applications,” Ellison said.
Food security, Internet access in rural schools and rural hospitals are other examples of what Ellison said are among “all kinds of interesting new AI applications that you probably haven't heard of before, at least I haven't heard of before” until the 2010s. The last 12 we worked on and we are now in the implementation phase.”
He also referred to the automation of vaccination programs and other health care programs “in all fields.”
“We live in a world where data and information are the gold of the future,” said Dan Gardner, CEO of digital strategy agency Code and Theory. “If the government can access their data and take action on it faster, why would we want to slow it down? We want it to be as efficient as possible. A lot of that is like mundane human resources, maybe these people could be doing something else that's more valuable.”
Cloud and generative AI applications that allow countries to give rural areas access to the Internet can increase educational opportunities and create more economic value. This could also allow citizens to gain more knowledge about government operations, said Tapan Parikh, an associate professor at Cornell University. “The one thing technology has always been good at is making bureaucracies more efficient, or at least more transparent internally,” he said.
“Black Mirror” governments.
But the push to move more government operations to the cloud also opens the door to new risks, especially as states trust newly developed generative AI systems. Although it may make operations faster than ever before, mistakes are bound to happen as technology evolves and can make citizens' data accessible to cybercriminals.
“We should not use these technologies as an excuse not to maintain oversight and control over political processes,” Parikh said. “Certainly, I think that's very important, especially when you're dealing with countries that may not have the same kind of governance capacity.”
Oracle did not respond to a request for additional comment on Ellison's earnings call discussion.
“There's the bad side of Black Mirror: Big Brother, the data wars, the AI wars, all that stuff,” Gaarder said. “In terms of removing red tape, increasing efficiency and making better use of crops across the country, this is incredible. This is the multiplier for humanity that can really improve thanks to AI.”
Artificial intelligence raises a range of concerns.
Gardner pointed to the proliferation of more production content in an election year around the world and all the issues related to technology-enabled intervention. “Maybe it's not like chips on the ground. But it's about data security, verifying your identity, who the governments are, what content you're watching, all the touchpoints between financial systems, and AI governance. Using AI as a tool of destruction is very scary.”
“No large government in the world can afford to move all of its services, especially critical services like defence, tax and healthcare, entirely to the cloud and into the hands of the new generation of AI,” said Simon Bohnenberger, chief product officer at the cloud company. phrase. “It's not in the realm of doing that. I think it's not responsible. The potential risks outweigh the benefits of doing that.”
OpenAI, which created ChatGPT, is trained mostly on content found on the Internet. This can be a problem, especially when text from lesser-known languages such as Albanian needs to be parsed, Bonenberger said.
“If you look at the World Wide Web or the Internet, the vast majority of the content there is in English, and I think a quarter of the content is in English, followed by Chinese,” she said. “Albanians are a minority. It's very questionable to me how well this will work in a small country like Albania and such an outlier language, because there's not a lot of data that you can train the model on. And if you don't have a lot of data, the output is going to be very messy.”
Parikh said there are security and data risks in allowing foreign companies to access citizens' data. Even the United States, with all its resources, has been vulnerable to data breaches, including a recent February incident with contractor CGI Federal that exposed personally identifiable information about employees. The recent battle between the United States and China over TikTok is an example of how control over sensitive consumer data is embedded in geopolitics. “I definitely think this is a concern for countries that work with sellers from different countries,” Parikh said.
