Oracle soars as it cashes in on the AI boom

Plus: Starbucks shares continue to fall under its new CEO, and does anybody actually want a new iPhone Air, and does Elon Musk deserve a trillion dollar pay packet?

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Cheddar's Big Business This Week
September 11, 2025

On Tuesday, tech firm Oracle $ORCL ( ▼ 6.24% )  announced one of the most transformative contracts in modern business history. OpenAI will pay Oracle $300 billion over five years to host AI applications on Oracle's servers. The news sent Oracle shares up as much as 43%, and secured OpenAI’s ability to offer its large language models to clients. It’s also put Oracle founder and CEO Larry Ellison, now 81, just ahead of Elon Musk as the world’s richest man, according to Bloomberg. BBTW editor Peter Green sat down with AI consultant Lee Gaul, founder of Long Horizon AI Consulting, to understand the transaction.

BBTW: What just happened?

Lee Gaul: Oracle! Like Obi-Wan Kenobi, this is a name I haven't heard in years. But it makes a lot of sense: Companies are scrambling for what they call “more compute”, which means more servers on which to do their calculations. There are two competing ideas around the amount of compute that AI needs. Most commonly, when people hear about computers, they think of training these models. But it's serving that AI that really is the name of the game. And it's a real bottleneck for a lot of companies. There's a limited number of real players out there, and the big three, Azure [Microsoft] $MSFT, Google Cloud $GOOG, and Amazon $AMZN Web Services, only have so much capacity. 

So who is selling what to whom? 

OpenAI is buying, or essentially renting space in the Oracle cloud to run their AI models. So, when you make a call to ChatGPT, that is happening in the cloud on Azure. And now it'll also happen with Oracle. OpenAI also uses Google, because they have to have that serving of that whole exchange with their chatbots on a massive cloud infrastructure. And that's why it's such a smart move for Oracle to get those big investments. 

How does this affect OpenAI’s relationship with Microsoft?

OpenAI uses the Azure cloud to train, to provide inference, or serve the product to their end users. They’ve been going to Google and now they're going to Oracle, as well.

Will Oracle have to buy lots of Nvidia chips to build data centers, or is this going to use existing capacity?

They've already got this capacity in place and with plans to continue to scale out the cloud infrastructure that they have. They've been shopping their capacity around and saying, look, we can support this amount and this capacity of cloud infrastructure and advanced AI processing capabilities today. They're by no means building this up from scratch. 

How long will this last?

That’s the problem. The chips are only state-of-the-art for a year or so. So the data centers  all have to be continually buying the most recent state-of-the-art chips. 

Is this a new direction for Oracle? Is it saving them from extinction?

I don't think it's in any way saving them from anything. Oracle is still ubiquitous and databases basically all run on Oracle, so that means that they've been quietly part of everyone's tech stack in the enterprise for forever. Oracle had been overlooked as anything but a necessary evil. Now, they are able to say, hey, look, we have tons of advanced computing that we are ready to provide to all the cutting-edge AI systems out there. It's all over Twitter and it's all over the news, it's been good for their brand. 

This interview has been edited and condensed for brevity and clarity.

—Peter S. Green

Poll of the week: Surprised?

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Big Businesses mentioned this week:

This week, big business!

The usual suspects

  • It’s not just the milk that’s getting steamed at Starbucks $SBUX ( ▼ 0.63% ) : Baristas at Starbucks’ 17,000 U.S. stores are finding new CEO Brian Niccol’s hyper-caffeinated charge to rebuild the brand's reputation and bring back a welcoming coffeehouse environment to be a tall order, and they’re vente-ing to the New York Times. Making a six-step Strawberry Matcha Strato Frappuccino in under a minute while handling new orders, looking customers in the eye and scrawling thank you notes on cups is getting to be too much, one Barista told the paper. And it’s not working: July marked Starbucks’ sixth consecutive quarterly decline in same-store sales open for at least a year. Starbucks shares are down nearly 11% in the past year. 

  • Oh thank heaven: Slurpees may no longer be the “Coolest thing on Earth.” 7-11’s Japanese parent company, Seven & i wants to spend $13 billion to improve its 13,000 U.S. stores, bringing the kind of prepared foods that make 7-11 a go-to pit stop in Japan. They’ve even talking about bringing their famous egg salad sandwiches, which the late chef Anthony Bourdain called “pillows of love.” They need to, because in the U.S., 7-11s are known more for late-night robberies than their food, and because after fending off a Canadian takeover, Seven & i’s share price is down 15% this year. 

  • Coders of the World, Unite! Mark Zuckerberg’s AI hiring spree, and the 7- and 8-figure salaries that went with it have created a new class divide at Meta $META ( ▼ 0.09% ) . As the old programming elite becomes the proletariat of the AI era, their faded stars are growing resentful of the new elite, the Wall Street Journal gleefully reports. But some clever Meta employees have figured out how to play their employer: After receiving offers from rivals, they went back to Meta and got bigger offers and a chance to join the new cool club, the superintelligence lab known as the TBD Team. 

  • iPhone Umpteen: Those slick folks at Apple $AAPL ( ▲ 1.58% ) have unveiled their latest piece of pocket candy, the iPhone Air, and while it’s not quite made of ether, it’s a third less thick than previous models and sells for, er, only $999. How many consumers will feel it's time to upgrade is an open question, just as Apple needs help. Delays in releasing promised AI-powered devices and consumers who say they’re tired of paying for expensive upgrades helped shares drop 4.6% since the new product announcement Tuesday. They’re down 7% so far this year. 

  • Exxon’s quiet EV move: Exxon $XOM ( ▼ 0.32% ) , the biggest U.S. oil company, says its buying production and research facilities from Superior Graphite, a closely held Chicago company that makes materials used to power electric cars. An Exxon exec conceded that despite the companies’ proven oil and gas reserves of nearly 20 billion barrels, Exxon actually sees a carbon-free future for EVs and energy storage.

The short stack

  • Keeping it Cracker: Not only will the Old Timer stay put on Cracker Barrel’s $CBRL ( ▲ 6.02% ) signs, but a move to declutter the chain’s restaurants and remove the kitschy Americana that gives the shops their identity, is also out the door. De-cluttered restaurants and a new menu didn’t bring in more customers, the firm said, so its sticking with what works. Shares are down 10% this year, though they are still up 34% in the past 12 months.

  • Shoe Fly: Two of the greatest of NBA greats are battling for the wallets of Chinese consumers. Athletic footwear is a $33 billion market and growing in China, and LeBron’s Nike $NKE ( ▲ 0.11% ) sponsors and Steph’s Under Armour $UAA ( ▲ 0.8% ) brand have been giving their respective pitchmen tours of China to boost sales, which are falling against local brands. Nike’s China sales dropped 13% to $6.6 billion last year, and Under Armour’s Asia Pacific sales slipped 14% to $755 million. But local brand Anta $ANPDF ( ▲ 2.77% ) saw its total revenue jump 14% to $9.9 billion, with ad campaigns led by Kyrie Irving and Klay Thompson. 

Car talk

  • Hyundai is left High and Dry: The real story of the ICE raid on Hyundai’s $HYMTF ( ▼ 7.44% )  $5.5 billion Georgia Metaplant seems to be that foreign carmakers can’t find enough specialized U.S. workers to build their high-tech plants, and when they turn to their home-country employees, they can’t get the visas they need in time. President Trump has promised to make it easier to get those visas, but the U.S. still needs to tackle job training. The industry says 67,000 jobs will go unfilled unless the U.S. beefs up job training programs. Without Americans or foreigners to fill those jobs, South Korea’s promised $350 billion in investments and hundreds of billions more from other countries may never happen. 

  • Beemer Up? BMW $BMWYY ( 0.0% ) and Mercedes $MBGAF ( ▲ 0.57% ) are putting the heat on Tesla $TSLA ( ▲ 5.88% ) with new luxury SUVs to take on the aging Model Y. Why not? Mercedes GLC and BMW’s iX3 go farther and charge faster than the Model Y, but the higher prices ($80,000 for the electric Beemer) will test consumer appetites. 

  • Crazy for Copper: As AI and electric cars promise a future of unmatched productivity and prosperity, one element will be in demand: Copper. With supplies stable, prices for copper are expected to rocket. Now, U.K.-based mining giant Anglo-American $AAUKF ( ▲ 0.93% ) is proposing a $53 billion merger with Canada’s Teck Resources $TECK ( ▲ 3.02% ) . Another impetus: As the Russian invasion of Ukraine has pushed NATO states to increase defense spending, a lot more copper will be going into bullets and shell casings.

Trumplandia

  • The numbers game: The last time a bad bunch of employment data came in, President Trump fired the head of the agency that collects the data. Now, annual revisions to the jobs, data, based more on hard data and less on surveys, shows employers added 911,000 fewer jobs than had been assumed, from March 2024 through March 2025. Thats a 52% shortfall. For Trump, it’s a double-edged sword. It shows his economic policies have failed to create many new jobs, but it bolsters the case for a rate cut, which has sent markets up this week.

  • Ken Griffin breaks his silence: U.S. businesses have been remarkably silent as President Trump has attacked the independence of the Federal Reserve. Now Trump supporter Ken Griffin, the founder and CEO of hedge fund firm Citadel, has taken to the conservative opinion pages of the Wall Street Journal to warn Trump to keep his hands off Fed chair Jerome Powell. “The president’s strategy of publicly criticizing the Fed,” wrote Griffin, “carries steep costs. These actions raise inflation expectations, increase market risk premiums, and weaken investor confidence in U.S. institutions.”

  • “I’m Gonna Punch You in Your _____ Face”: Last month, Trump’s housing finance chief, Bill Pulte, whose family of homebuilders also offers financing for the tract houses they build, accused Fed governor Lisa Cooke of mortgage fraud for allegedly claiming two different homes with government-backed mortgages were both her primary residence. Pulte hasn’t shown any evidence. Now, Fed watchers are reaching for the popcorn. First, a Federal judge ruled that Trump’s ouster of Cooke may have been illegal, since the alleged fraud would have taken place before Cooke began her term on the Fed. Then, Reuters dug into public records and found that Pulte’s dad, Mark, claimed homes in both Michigan and Florida as his primary residences, the same allegation Pulte junior made against Cooke. Then Treasury Secretary Scott Bessent, who was suspected of having given Elon Musk a black eye, confronted Pulte over reports the housing scion had been badmouthing him to Trump. “Why the ___ are you talking to the president about me? ____ you,” Bessent told Pulte at   dinner with Trump. “I’m gonna punch you in your _______ face,” Politico reported he said. Bessent also offered to “go outside.” “To do what?” asked Pulte, “to talk?” No, Bessent replied. “I’m going to ________ beat your ___.”

  • Tariffs: So what happens when the Supreme Court finally rules on whether Trump’s tariffs are legal? Economists and businessowners note that U.S. companies have been absorbing most of the tariffs so far, fearful that passing on the added costs would scare away consumers. That means that killing the tariffs would be like a massive tax cut for business. “You would be doing a tax cut,” Alex Durante, an economist at the Tax Foundation told the New York Times. “You would be undoing a tax increase, and you would provide relief to lots of businesses and consumers.” 

Elon’s World

  • Trillions and Trillions: If Elon Musk can increase Tesla’s $TSLA ( ▲ 5.88% ) share price eight-fold over the next decade, he could collect nearly $900 billion, the world’s largest incentive pay package ever, and become the world’s first trillionaire. That’s what Tesla’s board is proposing to shareholders. To do that he’d have to raise Tesla’s market cap to $8.5 trillion, but it would leave him with nearly 29% of the company. He could only cash in after 7 ½ years, and would have to stay 10 years for the full payout. And then there are the targets: deploy 1 million autonomous taxis and a million humanoids, and boost profit 24-fold. Tesla’s board says it’s the only way they can keep Musk’s full attention on the company. But as BBTW discussed recently, keeping Musk’s eye on the ball has become increasingly difficult. Meanwhile, the median salary for a Tesla employee was $57,000 last year. 

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Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.