Larry Ellison, president and chief technology officer of Oracle, speaks at the Oracle OpenWorld conference in San Francisco on September 16, 2019.
Justin Sullivan | Getty Images
Every tech company is talking about the AI opportunity. Oracle is no exception. But during an earnings call in March, Oracle’s Larry Ellison laid out a future market opportunity focused on an important customer that investors might think about less often than Fortune 500 companies.
The Oracle founder, former CEO and current president and chief technology officer sees national and state government applications running on platforms like Oracle Cloud Infrastructure to a much greater extent than they do today, and he indicated that this is starting to happen with various ways.
“We’re talking about, you know, winning business with companies. For the first time, we’re starting to win business for countries,” Ellison said. “We have many countries where we negotiate sovereign territories with the national government.”
Big tech companies competing for huge government contracts in the cloud is nothing new. Microsoft and Amazon have had a long battle over a cloud deal with the Department of Defense, and both these AI players as well as Oracle and Google have settled on a $9 billion DoD contract in 2022.
But Ellison went further in his prediction when he spoke to analysts on the recent earnings callsaying “Every government, almost every government, will want a sovereign cloud and a special region for that government.”
Oracle, which is working with Nvidia and Microsoft on productive AI capabilities, has already helped use cloud technology to cut red tape for countries. An example Ellison gave was Albania. is trying to upload to the European Union with the help of chatGPTwith genetic AI helping to decipher and digest its laws and helping the country with what needs to change in order to comply with EU regulations.
“Serbia took eight years to harmonize its laws before it could join the EU,” Ellison said. “Albania is facing the same thing, but with genetic AI, we can read the entire body of Albanian laws and actually harmonize their laws with the EU in probably more than 18 months to two years.”
Some analysts are skeptical of Ellison’s speech as more than a typical C-suite rally for a core business unit. Oracle shares are up about 21% YTD, but Barclays analyst Raimo Lenschow expressed concern about lower OCI growth during its latest earnings, which could “concern investors as it it’s the main investment story.”
A future version that includes cloud services and AI-powered solutions can make government more efficient. Ellison said for starters, redundancy is the government’s focus in disaster and disaster recovery. But it is also moving forward with health care information and internet access projects.
Countries including Serbia are standardizing on Oracle Cloud Infrastructure and using genetic AI for processes such as healthcare automation. Agreements related to providing Internet services in partnership with Elon Musk’s Starlink in remote areas are taking place in Kenya and Rwanda, where OCI and Starlink are mapping rural farms to see which crops are growing in which area and if they are getting enough nutrients such as nitrogen and water.
“These maps are supported by artificial intelligence, they help them plan their agricultural production and forecast their agricultural production, forecast markets, logistics of agricultural production, do all these things as next-generation national applications,” he said. Ellison.
Food security, Internet access in rural schools and rural hospitals are other examples of what Ellison said are among “all kinds of interesting new applications of artificial intelligence out there that you’ve probably never heard of, at least I hadn’t until these past 12 months now that we’ve been working on and we’re now in the process of delivering.”
He also mentioned the automation of vaccination programs and other health care programs “in general.”
“We live in a world where data and information are the gold of the future,” said Dan Gardner, CEO of digital strategy firm Code and Theory. “If the government can access and act on this data faster, why would we want to slow it down? We want it to be as efficient as possible. A lot of it is like mundane human resources, that maybe these people could it’s doing something else that’s much more valuable.”
The cloud and productive AI applications that enable countries to provide internet access to rural areas could increase educational opportunities and create greater economic value. It could also allow citizens to gain more insight into government processes, said Tapan Parikh, an associate professor at Cornell University. “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 processes to the cloud also opens the door to new risks, especially as countries rely on newly developed artificial intelligence systems. While they may make processes faster than ever, there are bound to be mistakes as technology develops and could make citizens’ data accessible to cybercriminals.
“We should not use these technologies as an excuse not to maintain oversight and control of 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 ability to govern.”
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, data wars, AI warfare and all that,” Garder said. “In terms of removing red tape and making efficiency and better use of crops across the country, that’s incredible. That’s the multiplier of humanity that could really be improved because of AI.”
Artificial intelligence raises a number of concerns.
Gardner pointed to the proliferation of more productive content in an election year around the world and all the issues related to interference through technology. “Maybe it’s not like a chip in the ground. But it’s data security, authentication of who you are, who the governments are, what content you see, all the connection points between financial systems and AI governance. The use of AI intelligence as a tool, the destruction is very frightening.”
“No major government in the world can afford to move all its services, especially critical ones like defense, tax, healthcare, completely to the cloud and into the hands of artificial intelligence,” said Simone Bohnenberger, Chief Product Officer in the cloud company. Phrase. “It’s just not in his realm, I think it’s not responsible to do that. The potential risks outweigh the benefits of it.”
OpenAI, which created ChatGPT, is primarily trained on existing web content. That could pose a problem, especially when text from lesser-known languages like Albanian needs to be parsed, Bohnenberger said.
“If you look at the World Wide Web or the Internet, the vast majority of content is English, I think a quarter of the content is English, followed by Chinese,” he said. “Albanian is a minority. It’s very questionable to me how well it works for a small country like Albania and as a weirder language, because there’s just not a lot of data you can train a model on. And if you don’t have a lot of data , then the results will be very messy.”
Then there are security and data risks with allowing foreign companies to access citizens’ data, Parikh said. Even the US, with all its resources, is vulnerable to data breaches, including a recent incident in February involving a contractor CGI Federal that disclosed personally identifiable information about employees. The recent battle between the US and China over TikTok is an example of how the control of sensitive consumer data can interfere with geopolitics. “I think that’s definitely a concern for countries that work with suppliers from different countries,” Parikh said.