Oracle Thrives As Cloud Provider In AI Area

"Oracle missed the tech industry's move to cloud computing last decade and ended up an also-ran. Now the artificial-intelligence boom has given it another shot.

The 47-year-old company that made its name on relational database software has emerged as an attractive cloud-computing provider for AI developers such as OpenAI, sending its long-stagnant stock to new heights.

Oracle shares are up 34% since January, well outpacing the Nasdaq's 14% rise and those of bigger competitors Microsoft, Amazon.com and Google.

It is a surprising revitalization for a company many in the tech industry had dismissed as a dinosaur of a bygone, precloud era. 

Oracle appears to be successfully making a case to investors that it has become a strong fourth-place player in a cloud market surging thanks to AI.

Its lateness to the game may have played to its advantage, as a number of its 162 data centers were built in recent years and are designed for the development of AI models, known as training.

In addition, Oracle isn't developing its own large AI models that compete with potential clients.

The company is considered such a neutral and unthreatening player that it now has partnerships with Microsoft, Google and Amazon, all of which let Oracle's databases run in their clouds. Microsoft is also running its Bing AI chatbot on Oracle's servers.

Other big clients include xAI and Nvidia. Oracle co-founder and Chief Technology Officer Larry Ellison's tight relationship with their respective chief executives, Elon Musk and Jensen Huang, helped seal those deals.

The company touted the benefits of a burgeoning AI business in its earnings Monday, posting cloud-infrastructure revenue that was up 45% from the same quarter last year. Its results beat expectations and, coupled with robust guidance, sent the stock up 9% in after-hours trading.

Ellison said on the call that building giant data centers is "something that Oracle has proven to be very good at. It's the reason we're doing so well in the AI training business."

A recent report from Morgan Stanley estimated AI revenue will increase from 15% of Oracle's total cloud revenue in its most recent fiscal year to more than half by 2027.

"Oracle is being looked upon more as an AI play as opposed to relational databases," said Dan Morgan, a portfolio manager at Synovus Trust who owns Oracle shares.

The company rebuilt its cloud business in 2018 after a disappointing launch two years earlier. Now it is pouring billions of dollars into Ellison's plan to build 100 more data centers.

Part of its pitch to clients is that it isn't trying to upsell them on other cloud services or proprietary chips the way bigger providers often do.

"They're not testing out experimental things. They're just building something that really works," said Nick Frosst, the co-founder of AI startup Cohere. Oracle is one of the company's investors and cloud providers.

Ellison, who at 80 years od remains one of the most influential people in Silicon Valley, has played a key role in the company's success in AI. Not long after xAI launched last year, he shared a late-night meal with Musk and Huang at the Japanese restaurant Nobu in Palo Alto, Calif., to hash out a deal for chips and cloud computing.

Nvidia selected Oracle to host its own cloud offering, which features Nvidia's most advanced graphics processing units -- the chips used to train AI models. Nvidia's GPUs have been a scarce and highly sought commodity in the tech industry.

Analysts say the biggest risk to Oracle is that all the AI spending coming its way could prove transitory.

xAI, one of Oracle's biggest customers in the sector, is building its own AI data center in Memphis, Tenn., to train the next generation of its Grok large language model, instead of using Oracle.

Many of Oracle's AI customers have been using its cloud to train their models -- a process that involves ingesting massive amounts of data to construct the brains of the software.

While it is an expensive process and good business for Oracle, it is also a one-time deal. 

Once the model is trained, it can operate on another cloud. Some AI companies might prefer to run their services with larger cloud companies that can sell it to their broader array of clients.

OpenAI, for example, plans to do some of its training work with Oracle but hosts its models exclusively on Microsoft's cloud.

Ellison said Monday he believes demand for AI training will continue unabated.

"This business is just growing larger and larger and larger," he said. "There's no slowdown or shift coming."

The company is also betting that budding relationships with AI startups and longstanding ones with companies that use its database software will help keep them on board.

As its bigger competitors keep building more AI data centers, there may be less excess demand coming Oracle's way, however. With its more limited resources, the company may also struggle to maintain the edge on technology it got by coming to the cloud late.

"Given the significant amount of [capital spending needed] to effectively compete in AI infrastructure longer term, I do wonder whether Oracle can sustain what I view as a transitory architecture lead," said Stifel analyst Brad Reback." [1]

1. Oracle Thrives As Cloud Provider In AI Area. Dotan, Tom.  Wall Street Journal, Eastern edition; New York, N.Y.. 11 Sep 2024: B.1.

Kinija naudoja sudėtingą technologiją, kad atrakintų daugybę baterijų metalų

 „Prieš šešerius metus Kinijos inžinieriai nuėjo rizikingu keliu, kad šiukšles paverstų lobiu.

 

 Jų tikslas buvo didžiulis nikelio ir kobalto turinčios rūdos kiekis, kuris dengia tolimas Indonezijos salas, tačiau yra toks žemos kokybės, kad buvo traktuojamas, kaip tik atliekos. Jei inžinieriai galėtų išsiaiškinti, kaip jį apdoroti, jie atrastų naują ne vieno, o dviejų mineralų, kurių pasauliui reikia elektromobilių akumuliatoriams, šaltinį.

 

 Pagrindinis ilgą laiką žinomas šio tipo nikelio apdorojimo metodas, vadinamas aukšto slėgio rūgšties išplovimu arba HPAL, buvo žinomas, kaip sudėtingas. Vakarų įmonės bandė tai padaryti, bet patyrė daug nesėkmių. Karšta temperatūra ir didžiulis slėgis, susijęs su procesu, sugadino įrangą, todėl reikėjo ilgo remonto. Susidarė didžiulis kiekis rūgščių atliekų, kurias sunku pašalinti.

 

 Bandymai kurti sprendimus dažnai tiesiog sukėlė daugiau problemų.

 

 Trys Australijos projektai 2000-aisiais sunkiai dirbo ir negalėjo pasiekti pajėgumų, kol jų savininkai nepateko į sunkią finansinę padėtį. Vakarų kalnakasiai įleido milijardus dolerių į objektą Naujojoje Kaledonijoje, kuris neveikė taip, kaip buvo numatyta ir, galiausiai, buvo išparduotas.

 

 Nuošalioje Papua Naujosios Gvinėjos miškingoje vietovėje valstybinė Kinijos inžinerijos įmonė „China ENFI“ ilgus metus sprendė problemas. Iš pradžių įrenginys turėjo visus HPAL nesėkmės požymius. Antraisiais veiklos metais, 2013 m., jis pagamino maždaug 40 % pajėgumų. 2016 m., sprogus vamzdžiui, žuvo darbuotojas ir gamykla buvo uždaryta 78 dienoms.

 

 Tačiau ENFI patronuojanti įmonė, valstybinė kalnakasė, turėjo gilių kišenių ir lažinosi, kad, turėdama pakankamai laiko, gamykla galės pradėti veikti. Iki 2017 m. jis pradėjo ir pasiekė projektinius pajėgumus.

 

 „Penkerių–šešerių metų trukmės padidinimas būtų sužlugdęs bet kurią Vakarų bendrovę, todėl daugeliui HPAL projektų yra antrieji savininkai arba jų nebeliko“, – sakė Kanados nikelio pramonės konsultantas Lyle'as Trytenas, HPAL projektų visame pasaulyje inžinierius.

 

 Papua Naujosios Gvinėjos gamykla žymi didelį pokytį nuo 2000-ųjų pradžios. Tuomet Kinijos nikelio žinios pagrindinėse srityse atsiliko nuo Vakarų. Kinijos įmonės turėjo mažai patirties, naudojant rūgštį rūdoms apdoroti aukštesnėje, nei 350 laipsnių temperatūroje. Maždaug tada Kinija ENFI įkūrė tyrimų padalinį, kad galėtų pasivyti.

 

 Jo sėkmė Papua Naujojoje Gvinėjoje reiškė, kad šimtai Kinijos inžinierių ir technikų žinojo, kaip sukurti ir eksploatuoti klestinčią HPAL gamyklą. Vis dėlto nebuvo savaime suprantama, kad jie galės pakartoti sėkmę Indonezijoje. Daugelis analitikų prognozavo, kad jie susidurs su tokiomis pat kliūtimis ir dažnais gedimais, kaip Vakarų gamyklos visame pasaulyje.

 

 Privati ​​Kinijos įmonė Lygend Resources and Technology pasistūmėjo į priekį ir pasamdė ENFI. Anot su projektu susipažinusio asmens, jie pradėjo ruošti žemę statybai rytinėje Indonezijos Obi saloje 2018 m. gruodžio mėn.

 

 Patyrę Kinijos inžinieriai atskrido į svetainę, kurioje buvo tik šalto vandens dušai ir dviaukštės lovos.

 

 „Kinijos inžinierių požiūris į gyvenimą ir darbą skiriasi nuo mūsų“, – sakė „Lygend“ vyriausiasis inžinierius Wangas Duodongas. „Norėdami gerai atlikti savo darbą, jie noriai daug laiko praleis, dirbdami tokiose atokiose statybvietėse."

 

 Jie prireikus pakoregavo procesą, pavyzdžiui, perėjo prie pigesnio titano tipo. Jie naudojo metodą, skirtą sumažinti galutinio nikelio gaminio drėgmės lygį, kad pagerintų efektyvumą, sakė Wang. Lygend medžiojo Kinijos įmones, kurios galėtų pagaminti pigesnes vakarietiškos įrangos versijas.

 

 Tuo metu Japonijos ir Vakarų bendrovės laikėsi atsargios pozicijos, susirūpinusios dėl išlaidų ir galimos žalos aplinkai. Kinijos valdomoje gamykloje Papua Naujojoje Gvinėjoje dėl siurblio gedimo 2019 m. mineralinės srutos išsiliejo iš rezervuaro į netoliese esančius vandenis, o tai leidžia suprasti riziką.

 

 Atrodo, kad tai nesustabdė Indonezijos projekto, kuris buvo Lygendo ir Indonezijos nikelio kasyklos Harita partnerystė.

 

 Iki 2021 m. pirmosios dvi gamybos linijos buvo sukurtos ir veikė visu pajėgumu.

 

 Wang teigė, kad jų tikslas buvo išlaikyti paprastą ir supaprastintą gamyklos dizainą ir kuo labiau automatizuoti, kad būtų sumažintos klaidos, sakė jis. Jie studijavo Vakarų projektus, kurie nepasiteisino. "Mes iš tikrųjų pasimokėme iš šių nesėkmingų projektų, išanalizavome jų trūkumus", - sakė Wang.

 

 Vėliau sekė Kinijos valdomų objektų banga. Šiandien visoje Indonezijoje veikia mažiausiai keturios tokios HPAL gamyklos, o kitų metų pabaigoje tikimasi dar trijų projektų.

 

 Vakarų kalnakasiai teigia, kad Kinijos įmonės įgyja nesąžiningų pranašumų, gaudamos pigias vyriausybės paskolas ir todėl, kad jos mažai atsižvelgia į darbo teises ir aplinką. Indonezijoje Kinijos įmonės pastatė daugybę anglies jėgainių, kad galėtų maitinti savo nikelio antplūdį, kai Pietų šalys bando sumažinti nešvaraus iškastinio kuro naudojimą, o Vakarai vaizduoja, kad bando.

 

 Įvyko daugybė mirtinų nelaimingų atsitikimų, įskaitant sprogimą Kinijos nikelio lydykloje Indonezijos Sulavesio saloje, per kurią gruodį žuvo mažiausiai 19 darbuotojų.

 

 Tačiau daugelis Vakarų kalnakasių ir analitikų taip pat teigia, kad Kinijos mineralų gamybos įmonės padarė esminį proveržį su HPAL ir gerai apdoroja mineralus." [1]

 

1. China Harnesses Tricky Technology To Unlock Trove of Battery Metals. Emont, Jon.  Wall Street Journal, Eastern edition; New York, N.Y.. 11 Sep 2024: B.1.

China Harnesses Tricky Technology To Unlock Trove of Battery Metals

"Six years ago, Chinese engineers set out on a risky path to turn trash into treasure.

Their target was the vast quantities of ore containing nickel and cobalt that blanket Indonesia's distant islands but are of such low grade that they were treated as little more than waste. If the engineers could figure out how to process it, they would unlock a new source of not one but two minerals the world needs for electric-vehicle batteries.

The main method long known to process this type of nickel, called High Pressure Acid Leach, or HPAL, was notoriously tricky. Western companies had tried to make it work but suffered high rates of failure. Scorching temperatures and enormous pressure involved in the process damaged equipment, requiring lengthy repairs. It generated vast amounts of acidic waste that is difficult to dispose of.

Attempts to design solutions often just created more problems.

Three Australian projects struggled in the 2000s, unable to reach capacity before their owners ended up in dire financial straits. Western miners poured billions of dollars into a facility in New Caledonia that didn't work as intended and was ultimately sold off.

In a remote forested area of Papua New Guinea, a state-owned Chinese engineering company, China ENFI, spent years working out the kinks. At first, the facility had all the hallmarks of an HPAL bust. In its second year of operation in 2013, it produced at roughly 40% of capacity. In 2016 a pipe burst, killing a worker and causing the plant to shut down for 78 days.

But ENFI's parent company, a state-owned miner, had deep pockets and bet that with enough time, it could get the plant working. By 2017, it had and was hitting design capacity.

"A five-to-six-year ramp-up would have crippled any Western company, which is why many HPAL projects are on their second owners -- or gone," said Lyle Trytten, a Canadian nickel-industry consultant who has been an engineer on HPAL projects around the world.

The Papua New Guinea plant marked a big shift from the early 2000s. Back then, Chinese nickel know-how lagged behind the West in key areas. Chinese companies had little experience using acid to process ores at over 350 degrees. It was around then that China ENFI established a research unit to catch up.

Its eventual success in Papua New Guinea meant that hundreds of Chinese engineers and technicians knew how to build and operate a thriving HPAL plant. Still, it wasn't a given that they would be able to duplicate the success in Indonesia. Many analysts predicted they would encounter the same roadblocks and frequent breakdowns as Western plants had around the world.

A private Chinese company, Lygend Resources and Technology, plowed ahead and hired ENFI. They began preparing land for construction in eastern Indonesia's Obi Island in December 2018, even before the detailed engineering design was finalized for the plant, according to a person familiar with the project. 

Experienced Chinese engineers flew to the site, which offered few amenities other than cold-water showers and bunk beds.

"Chinese engineers have a different attitude toward life and work," said Wang Duodong, Lygend's chief engineer. "In order to do their job well, they are willing to spend a lot of time working in such remote construction sites."

They tweaked the process where needed, such as switching to a cheaper type of titanium. They used a technique to reduce the moisture level of the final nickel product to improve efficiency, said Wang. Lygend hunted down Chinese companies that could make cheaper versions of Western equipment.

At the time, companies from Japan and the West were taking a cautious stance, concerned about costs and potential environmental damage. At the Chinese-run plant in Papua New Guinea, a pump failure in 2019 caused mineral slurry to overflow a tank into nearby waters, providing a glimpse of the risks.

That didn't appear to slow the Indonesian project, which was a partnership between Lygend and Harita, an Indonesian nickel miner.

By 2021, the first two production lines were up and running at full capacity.

Wang said their focus was to keep the plant design simple and streamlined, and to automate as much as possible to reduce errors, he said. They studied the Western projects that hadn't worked. "We actually learned from these failed projects, analyzed their disadvantages," said Wang.

A wave of Chinese-run facilities followed. Today, there are at least four such HPAL plants that are operational across Indonesia, with three more projects expected by the end of next year.

Western miners say Chinese companies gain unfair advantages from access to cheap government loans and because they pay scant regard to labor rights and the environment. In Indonesia, Chinese companies have built numerous coal plants to power their nickel rush -- expanding the use of a dirty fossil fuel the South is trying to cut back on, and the West pretends that it is trying too.

There has been a spate of deadly accidents, including an explosion at a Chinese nickel smelter on Indonesia's Sulawesi Island that killed at least 19 workers in December.

But many Western miners and analysts also say that Chinese mineral companies had a critical breakthrough with HPAL and are good at processing minerals." [1]

1. China Harnesses Tricky Technology To Unlock Trove of Battery Metals. Emont, Jon.  Wall Street Journal, Eastern edition; New York, N.Y.. 11 Sep 2024: B.1.