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On September 10, Oracle’s Founder Larry Ellison surpassed Elon Musk as the world’s richest billionaire, according to the Bloomberg Billionaire Index. That day, Ellison’s net worth increased by $89 billion, the biggest one-day increase ever record.

About Ellison & Oracle

Having previously worked on a project code-named Oracle, Ellison and his two friends produced Oracle Database, their flagship and first ever product. Oracle Database is a proprietary multi-model database management system that is used to store and manage information. Oracle Corp’s first customers included the Central Intelligence Agency and the U.S Air Force.

Though Oracle’s database products remained popular and profitable, the company’s growth is much attributed through its aggressive acquisitions of software companies across the years. Over its history, Oracle Corp’s executed many corporate acquisitions, including acquisitions of companies and individual products. These acquisitions included: PeopleSoft ($10.3 billion), Siebel Systems ($5.85 billion), and Cerner ($28.3 billion).

Now, Oracle Corp has recently gained strong momentum in the growing cloud computing market, positioning itself as a key provider of AI processing activity.

The Catalyst: Artificial Intelligence

On Wednesday, 10 September, Oracle Corp ($ORCL) shook Wall Street with its aggressive outlook for its cloud business with shares gaining the most since 1992.

Oracle’s optimistic outlook came as it raised its remaining performance obligation (RPO) based on customer agreements.

In a statement on Tuesday, CEO Catz said the company’s contract backlog increased by 359% to $455 billion in Q1. She also added that the company expects to “sign up several multi-billion-dollar customers,” and for RPO to exceed half-a-trillion dollars.

Following the company’s earnings call, CEO Catz mentioned significant cloud contracts with the hottest names of AI: OpenAI, xAI, Meta, and many others.

A Peak into Project Stargate, the $500 billion AI Infrastructure Initiative

Valuation & Market Risks: Is It a Bubble?

Only because of Artificial Intelligence, we can see a tech giant like Oracle Corp’s shares jump 36% in a day. While this rally reflects genuine optimism over Oracle’s AI ambitions, it also raises the not so comfortable question: Are markets pricing in too much, too soon?

While Oracle reported a staggering 359% increase in its contract backlog, these are commitments, not guaranteed revenue. If AI adoption slows or competition intensifies, those commitments could be delayed or canceled. The aggressive forecasts, such as CEO Catz’s projection for Oracle’s cloud infrastructure revenue to grow from $18 billion to $144 billion in just five years, assume continued exponential AI demand that leaves little room for error.

It is not peculiar to draw the parallels of the AI boom with the dot-com bubble of the late 1990s. During that time, companies with any association to the internet saw their valuations skyrocket overnight, often without earnings to back them up. Today, we see the AI space in a similar state.

On the contrary, figures like Jim Cramer argue that the crazy spending of this AI boom is not like the dot-com bubble: “Why does it look less like a bubble and more like an industrial revolution to me? It may be because I played a bit part in the 2000 dot-com burst, and I know how and why everything went kerflooey the way it did.”

Artificial Intelligence may very well be the defining technological revolution of this era, and Oracle has positioned itself brilliantly at the center of action. But markets have a habit of running ahead of reality. As with every gold rush, fortunes will be easily made, just as easily lost. Investors would do well to separate true growth stories from hype before betting on which companies play a role in AI’s future.

Is AI a true revolution, or merely a passing hype?