Thanks to the surge in Oracle's stock price driven by the 'ChatGPT' artificial intelligence (AI) craze, Chairman Larry Ellison's net worth has surpassed that of Microsoft (MS) founder Bill Gates for the first time.
According to the Bloomberg Billionaires Index on the 13th (local time), Ellison's net worth at the close of trading was $130 billion (approximately 38 trillion won), overtaking Gates ($129 billion) to become the world's 4th richest person. The gap with Jeff Bezos, Amazon founder and 3rd richest at $150 billion, has narrowed to $20 billion.
Bloomberg reported, "This is the first time Chairman Ellison has surpassed Gates, and it is also the first time he has entered the top 5 in the global billionaire rankings."
On the day, Oracle's stock closed at $116.43, marking an all-time high. Riding the rising market expectations for AI and the concurrent rise in tech stocks, Oracle's shares listed on the New York Stock Exchange (NYSE) surged as much as 6% intraday. Oracle's stock price has increased by 42% so far this year.
With the sharp rise in Oracle's stock price, the valuation gains on Ellison's holdings increased his net worth by nearly $38 billion this year, while Gates' net worth grew by only $19.9 billion. Most of Ellison's wealth is in Oracle shares, which also include about $11 billion worth of Tesla stock.
Bloomberg noted, Ellison is not the only beneficiary of the AI boom; Google founders Sergey Brin and Larry Page added $18 billion to their fortunes since the developer conference in May.
In the case of Jensen Huang, founder of semiconductor company Nvidia, his wealth more than doubled this year, marking the largest rise in ranking among the world's top 500 billionaires on the Bloomberg Billionaires Index.
In its earnings report after the market closed that day, Oracle announced that demand for its cash cow, cloud services, has significantly increased and that this trend is expected to continue. In the previous fiscal year (June 2022 to May 2023), the cloud division's Q4 revenue was $4.4 billion, up 54% year-over-year. The revenue growth rate in the previous quarter was 45%.
Bloomberg reported that while Oracle expects continued revenue growth, some are reacting that such high growth appears abnormal given the increasingly gloomy business environment amid recession concerns.
Oracle is focusing on expanding its cloud infrastructure business to strengthen competition with cloud market leaders Amazon and MS, who have recently experienced setbacks. It has also partnered to allow customers to use Nvidia's AI software and semiconductors through their own cloud services. The booming generative AI, which requires tremendous computing power, is believed to be driving increased demand for Oracle's cloud services.
Oracle's total revenue for this session rose 17% to $13.8 billion, exceeding market estimates. For the current quarter ending in August, it expects total revenue to increase by 8-10%.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
