Question · Q1 2026
Mark L. Moerdler questioned how Oracle plans to establish a differentiated moat in the AI training business to prevent commoditization and ensure sustained strong earnings and free cash flow, even if the demand for AI training eventually slows.
Answer
Larry Ellison (Chairman and CTO) concisely stated that Oracle's differentiation stems from its networks' ability to move data 'very, very fast.' He explained that superior performance in their GPU superclusters translates directly into cost advantages for customers; if Oracle is twice as fast, it effectively halves the cost for hourly billing, thereby creating a robust competitive moat. Safra Catz (CEO) concurred with this assessment.