Oracle Assures Investors on AI Cloud Margins as It Struggles to Profit From Older Nvidia Chips

Oracle on Thursday sought to reassure investors that its business of renting out servers packed with Nvidia chips to OpenAI, Meta and other artificial intelligence developers will become far more profitable as revenue surges.

Oracle co-CEO Clay Magouyrk told financial analysts Thursday that the company’s AI data center business, which is mostly made up of rentals of Nvidia graphics processing units, will eventually generate a gross profit margin of 30% to 40%. The Information last week reported that the firm’s gross margin from GPU rentals over the past five quarters was around 16%.