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France, UAE Agree to Build $30-$50 Billion AI Data Centre

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France and the United Arab Emirates (UAE) reached a framework agreement on Thursday to establish a 1-gigawatt artificial intelligence (AI) data centre, representing an investment of between $30 billion and $50 billion, according to the French presidency.

The deal was finalized during a meeting between French President Emmanuel Macron and UAE President Sheikh Mohamed bin Zayed al-Nahyan. The two leaders met ahead of an AI summit scheduled for February 10-11 in Paris, which will bring together representatives from about 100 countries to explore AI’s potential and discuss strategic initiatives.

The summit aims to bolster France and Europe’s position in AI, as they seek to compete with the U.S. and China, both leaders in the development of energy-intensive AI technologies.

In a joint statement, Macron and Sheikh Mohamed expressed a shared commitment to forming a strategic partnership in AI. The partnership will encompass investments in both nations’ AI ecosystems, the acquisition of advanced chips, development of data centres, talent cultivation, and the creation of virtual data embassies to support sovereign AI and cloud infrastructures in France and the UAE.

The first announcements on investments under this partnership will be made later this year at the “Choose France” summit. Meanwhile, the French government has identified 35 potential locations for AI data centres across the country.

Wiz Appoints Fazal Merchant as President and CFO to Prepare for IPO

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Israeli cloud security firm Wiz has appointed veteran executive Fazal Merchant as its president and chief financial officer (CFO) to continue its rapid growth and pave the way for a U.S. initial public offering (IPO) in the next year.

Merchant’s appointment comes after the company turned down a reported $23 billion acquisition offer from Google’s parent company, Alphabet, in July. Wiz’s CEO Assaf Rappaport emphasized that the company’s focus would now be on an IPO and reaching an annual recurring revenue of $1 billion.

Currently, Wiz generates approximately $500 million in annual revenue, having grown significantly since its 2020 founding. The company serves half of the Fortune 100 companies and has raised $1.9 billion in private financing, with a valuation of $12 billion after raising $1 billion in May 2023.

Merchant, who previously served as co-CEO of U.S. cybersecurity firm Tanium and CFO of DreamWorks Animation, highlighted Wiz’s healthy liquidity and its strategy to prepare for the IPO. He noted that IPO readiness could take 12 months, or potentially longer, depending on market conditions.

Merchant also emphasized Wiz’s goal of becoming the leader in cloud security as the global shift to cloud computing continues, with only 15% of the world’s infrastructure in the cloud. As the company expands in Europe and Asia, it sees significant growth potential in the cybersecurity sector.

 

Oracle Misses Quarterly Revenue Estimates Amid Intense Cloud Competition

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Oracle Corporation (ORCL.N) reported weaker-than-expected revenue growth for its fiscal second quarter, signaling increasing pressure in the competitive cloud services market. Shares of the company dropped over 7% in extended trading following the announcement.

Key Financial Metrics

  • Quarterly Revenue: Oracle posted $14.06 billion, a 9% year-over-year increase but slightly below analysts’ expectations of $14.11 billion, as per LSEG data.
  • Adjusted Earnings per Share (EPS): The company reported $1.47 per share, narrowly missing Wall Street’s forecast of $1.48.
  • Third-Quarter EPS Outlook: Oracle predicts adjusted EPS of $1.50 to $1.54, lower than the market expectation of $1.57.

Cloud Growth and Competitive Landscape

Oracle’s cloud segment continues to grow but faces tough competition from established players such as Microsoft and Amazon, often referred to as “cloud hyperscalers.” Despite this, Oracle has strategically partnered with these rivals by embedding its database architecture into Microsoft Azure and Amazon Web Services (AWS), enabling seamless data integration for customers.

Chief Executive Safra Catz expressed confidence in Oracle’s long-term growth, projecting total cloud revenue to exceed $25 billion in fiscal 2025. However, the company’s significant investment in cloud infrastructure—particularly through partnerships with Nvidia and the expansion of data centers—has led to increased capital expenditures and margin pressure.

Industry Insights

The tech industry’s high expectations for artificial intelligence (AI) have fueled Oracle’s 80% stock surge this year. However, analysts, including Rebecca Wettemann of Valoir, caution that these expectations are “overheated.”

Gil Luria, an analyst at DA Davidson, noted that Oracle remains a “distant fourth hyperscaler” in the cloud market despite its aggressive investments.

Challenges Ahead

Oracle’s need for substantial capital investment to keep up with competitors underscores the challenging nature of the cloud industry. While its partnerships and infrastructure upgrades may help close the gap, concerns over profitability and sustained growth in the face of rivals like Microsoft, Amazon, and Google remain significant hurdles.