Oracle Cloud Infrastructure Revenue Doubles, Inside Blackstone’s Bid to Rule Over AI Financing

Akash Pasricha (0:13)

Welcome, everyone, to The Information's TITV. My name is Akash Pasricha. We got a great show lined up for you today.

Before we get started, we have some news here at The Information. You probably know my colleague, Rocket Drew, pretty well by now. He is on here every week sharing all of his in-depth reporting on the technical debates shaping the AI sector. And personally, I have always hoped that those conversations would go on a lot longer. I have so many more questions for him. And lucky for us, The Information is launching a new weekly show that Rocket will be hosting. It's called AI Deep Dive. The first episode is going to air on Monday at 12 o'clock Pacific, 3 p.m. Eastern with a special guest. He is bringing on Gnome Brown, a top research scientist at OpenAI.

I want to play a short clip for you from that conversation.

SPEAKER_2 (1:05)

Here is Rocket.

SPEAKER_3 (1:08)

There's been a lot of discussion recently about the future of chains of thought, in part because of an article The Information published about a new technique that Astra is using where more thinking can happen sort of in the model's head. It can sort of keep more of its thinking to itself and do less thinking out loud, at least if this technique were to be scaled up in the future. So I'm curious what you made of this whole discussion. I think that idea really touched a nerve with some people. I'm sure it was all over your Twitter feed. It was all over my Twitter feed. What did you make of that whole dialogue? For chain of thoughts, Astra does have an observable chain of thought, and it is something that we can monitor. It's basically its behavior.

I do think chain of thought monitoring, first of all, it's a real gift. We were very lucky that this ever existed, and it is fragile. We've seen situations where companies have... There's the experiments that show, if you punish the model for thinking bad thoughts, that it will learn to think bad thoughts in a way that's not observable.

There's always a temptation, for example, during reinforcement learning, you can say, well, the model is thinking about hacking, and we should punish it for thinking about hacking. Actually, as counter to it as it sounds, you actually don't want to do that. You want to punish it for taking actions that are observable. If it takes actions to hack, then yes, punish it for hacking. But you don't want to punish it for its thoughts, because then you will simply lose the ability to monitor what it's thinking.

Akash Pasricha (2:48)

Make sure to tune in here on The Information's YouTube channel, or wherever you get your podcast, for AI Deep Dive. Today on this show, we're going to unpack Oracle's quarterly results. Top line growth accelerated, but the company is burning cash. We'll then bring on the co-founder of Baseten to talk about their latest acquisition. We've also got exclusive reporting on Blackstone's NeoCloud joint venture with Google.

To close out the week, we have the editor's cut. We'll get some opinions on the iPhone Duo, and the big question of the week, will AI end humanity? It's going to be a great show, so let's get right on into it.

Oracle reported its quarterly results. Revenue is expected to grow up to 34 percent in the current quarter. That is up from 30 percent in the most recent quarter and 21 percent in the quarter prior. I want to bring on Rishi Jaluria, managing director of software equity research at RBC Capital Markets. Rishi, welcome back to the show. It's great to have you here.

Rishi Jaluria (3:47)

Great to be here. Thanks for having me.

Akash Pasricha (3:48)

Okay, so lay it on us. The good, the bad, the ugly, the not-so-ugly, what d'you think?

Rishi Jaluria (3:53)

Yeah, look, I think overall it was probably, I would say, a better than feared quarter. There were concerns in there going about it.

Akash Pasricha (3:59)

Better than feared? My gosh, that is a low bar.

Rishi Jaluria (4:01)

Yeah, yeah. You've seen the action in Oracle. I mean, look, I think the OCI numbers were really strong. The RPO growth was good.

But I think when I was talking to clients, the worry was, are they going to have to raise their capbacks? Is there going to be an issue of some of the delays in some of the sites? And they kind of reaffirmed their cash capbacks and total outlay. And they reaffirmed their ability to maintain the guide or actually exceed the guide without expecting these New Mexico and Wisconsin sites that have been delayed to go online. So I think that's why you're seeing, you initially had the stock up in the aftermarket. But I think that's why you're seeing the stock more flat today, is just everyone's digesting all these different moving pieces.