Oracle Corporation’s earnings call on Wednesday revealed unprecedented demand for cloud infrastructure services. Chairman and CTO Larry Ellison even mentioned a customer order unlike any the company had previously received.
While initially the customer was not named, one huge company emerged in the discussion on the call: Temu, the Chinese e-commerce giant owned by PDD Holdings. This throws a glimpse into the evolving dynamics of global cloud computing, but also hints that the current US-China trading war might be only a temporary roadblock for the Chinese companies seeking global domination, writes eToro analyst for Romania, Bogdan Maioreanu.
During Oracle’s earnings call, Larry Ellison described an extraordinary customer request that was simple yet unprecedented: they wanted all available Oracle cloud capacity, regardless of geographic location. Ellison emphasized the uniqueness of this demand, stating that the company “never got an order like that before” and explaining that Oracle “had to move things around” to accommodate the customer’s needs. The scale of this demand reflects what Ellison characterized as “astronomical” appetite for cloud services, with Oracle struggling to keep pace with customer requirements.
While Ellison initially did not nominate the customer, during the earnings call he subsequently revealed that Oracle had secured a “gigantic deal” with Temu, the Chinese e-commerce platform. Ellison described Temu as “a very large company that’s growing extremely rapidly and they’re basically moving their infrastructure to the Oracle Cloud”.
Temu, launched in 2022 by PDD Holdings, operates as an international e-commerce platform targeting markets outside China, particularly in the United States and Western countries. The company’s main selling point is its prices. Delivered directly from Chinese suppliers and manufacturers, the platform cuts out many of the middleman companies that have been peddling Chinese products, giving customers direct access to Chinese-manufactured goods and bringing the overall cost of goods down significantly.
At the end of March, Oracle was on global retail investors’ radar on the trading and investing platform eToro. The number of investors holding this stock in their portfolios rose 61% over the previous quarter. Oracle is the 19th largest company in the world by market capitalization, only one step behind Netflix, with Microsoft being number one, followed by Nvidia and Apple. For the next fiscal year, Oracle’s revenue guidance is at least $67 billion, representing 16% growth in constant currency. With total cloud revenue to grow over 40% in constant currency, up from 24% in the current fiscal year. Oracle expects that cloud infrastructure revenue will grow over 70%, up from 51% in FY’25. But this is not without constraints. Oracle management acknowledged that supply is not meeting demand, a situation that the company has not seen in its history.
Oracle offers multi-cloud solutions, working together with Amazon, Microsoft and Google. Due to increased demand, management expects the number of MultiCloud datacenters to grow from 23 to 70 in the next year. However, in a tech heavy AI dominated world, Ellison pointed out that the Temu deal has nothing to do with AI, to showcase that Oracle is doing well in multiple markets, including its flagship database. Temu’s migration to Oracle Cloud may represent more than just a large contract.
Oracle’s previous experience with TikTok shows that it knows how to handle Chinese companies. It demonstrates Oracle’s ability to serve as a strategic infrastructure partner for rapidly scaling global businesses. This partnership comes at a time when Temu faces operational pressures from changing U.S. trade policies and needs robust, globally distributed cloud infrastructure to adapt to evolving market conditions. However, the size of the deal might also highlight that the Chinese companies are seeing the current tariff war between the US and China as a simple roadblock that, sooner or later, will be passed, giving way to their global domination plans.
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