Oracle (ORCL Quick QuoteORCL - Free Report) and NVIDIA (NVDA Quick QuoteNVDA - Free Report) have announced an extended collaboration to provide sovereign artificial intelligence (AI) solutions to customers worldwide. Sovereign AI refers to the development and deployment of AI technologies aligned with digital sovereignty frameworks.

This strategic partnership combines Oracle's distributed cloud, AI infrastructure and generative AI services with NVIDIA's accelerated computing and generative AI software.

Together, these two companies enable governments and enterprises to establish AI factories, facilitating the deployment of cloud services locally and within secure premises, thereby supporting sovereign objectives of diversifying and enhancing economic growth.

Key Components of the Collaboration

The collaboration offers turnkey solutions to help customers meet data sovereignty requirements. By combining NVIDIA's full-stack AI platform with Oracle's Enterprise AI, which is deployable across various Oracle Cloud Infrastructure (“OCI”) environments, customers gain greater control over operations, location and security.

ORCL's cloud services, leveraging NVDA's stack, including accelerated computing infrastructure and generative AI software, ensure flexibility and security. Oracle stands out as the sole hyperscaler capable of delivering AI and full cloud services locally and anywhere.

Empowering Sovereign AI Pioneers

Several organizations have already embraced these sovereign AI solutions. Avaloq, a leader in wealth management technology, selected OCI Dedicated Region to maintain maximum control over data residency while accessing the latest cloud infrastructure.

Similarly, TEAM IM, a prominent New Zealand-based information management services provider, leveraged Oracle Alloy to establish the country's first locally owned and operated hyperscale cloud, facilitating organizations to navigate the digital landscape securely.

Additionally, e& UAE, the telecom arm of e& group, has collaborated with Oracle to enhance its AI capabilities, intending to deploy NVIDIA H100 Tensor Core GPU clusters within its OCI Dedicated Region, thus accelerating AI innovation across the UAE.

Advancements in AI Infrastructure to Aid Top-Line Growth

Oracle plans to incorporate NVDA’s Grace Blackwell computing platform across OCI Supercluster and OCI Compute, enhancing performance for AI models significantly. The NVIDIA GB200 Grace Blackwell Superchip promises faster real-time large language model inference and lower total cost of ownership, revolutionizing AI training, data processing, and engineering design and simulation.

Furthermore, NVDA’s Grace Blackwell will be available on DGX Cloud on OCI, offering energy-efficient training and inference for complex AI models. With more than 20,000 GB200 accelerators and NVIDIA CX8 InfiniBand networking, this co-engineered supercomputing service ensures scalable and performant cloud infrastructure. These new features are expected to aid cloud services and license revenues.
The Zacks Consensus Estimate for ORCL’s fiscal 2024 cloud services and license revenues is pegged at $44.68 billion, indicating year-over-year growth of 26.5%. The Zacks Consensus Estimate for 2024 earnings is pegged at $5.54 per share, indicating year-over-year growth of 8.2%.

Shares of this Zacks Rank #3 (Hold) company have gained 21.1% year to date compared with the Zacks Computer and Technology sector’s growth of 8.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company faces tough competition from companies like Amazon (AMZN Quick QuoteAMZN - Free Report) and Microsoft (MSFT Quick QuoteMSFT - Free Report) . Amazon Web Services (“AWS”) offers cloud services tailored to government agencies across varying security classifications. With more than 7,500 government entities utilizing AWS, the platform emphasizes the crucial balance between efficiency and stringent security requirements.

Microsoft has crafted specialized plans for government organizations, addressing their distinct needs. These plans encompass all features of Microsoft 365 services, hosted within a dedicated government cloud environment to comply with the U.S. security and regulatory standards.