Oracle Integrates Generative AI to Compete in Cloud Market

Oracle Corporation (NYSE:ORCL) has announced the integration of generative artificial intelligence (AI) features into its suite of cloud-based software, marking a significant step in its competition with Microsoft (NASDAQ:MSFT) and other tech giants. This strategic move is aimed at enhancing Oracle's offerings in finance, supply chain management, human resources, and other business operations. The AI functionalities are designed to automate tasks such as generating reports, summarizing complex data, and creating job descriptions, thereby saving valuable time for users. Oracle's collaboration with Cohere, an AI startup founded by former Google employees, and its investment in Nvidia (NASDAQ:NVDA) chips underscore its commitment to advancing its cloud technology.

As a relatively late entrant to the cloud computing market, Oracle is leveraging these new AI features to catch up with industry leaders like Microsoft, which has been promoting its own 'Copilot' AI tools. Oracle's approach differs from consumer-facing AI applications like ChatGPT, as it focuses on about 50 specific business tasks where AI can assist, with a human employee reviewing the AI-generated output to ensure accuracy and reliability. This controlled implementation is intended to mitigate common AI pitfalls, such as generating incorrect information, while still boosting productivity.

Oracle's executive vice president of applications development, Steve Miranda, emphasized the importance of a controlled rollout to gather feedback and avoid issues associated with current AI technologies. The company's decision not to charge extra for these new AI features could make its software more attractive to businesses looking to integrate AI into their workflows without incurring additional costs. With Oracle's stock up by approximately 51% over the past year and a Moderate Buy consensus rating from analysts, the company's focus on AI-enhanced cloud services may further strengthen its market position and drive demand for its next-generation AI infrastructure.