Larry Ellison

Reed Hastings says Netflix walked away from Warner Brothers Discovery after the price rose past a bid the company was really happy with, because the purchase no longer made economic sense, and the exit brought a couple billion dollar breakup fee.

Netflix and Paramount spent months bidding for Warner Brothers Discovery. At the price Netflix had bid, the company was really happy. The price then went up a bunch, the new level seemed a bridge too far, and Netflix chose not to close a deal it could have done. Many people feel an $80 billion debt is insane unless the buyer is Larry Ellison, and pretty lofty even for Larry Ellison. Paramount's biggest challenge is the debt. Paramount is figuring o

Tyler Shultz says the old white men who backed Elizabeth Holmes were the mark, and they are also responsible. They gave her power, money, and credibility, and they did not do their diligence. On paper, the people who gave her $100 million checks are the victims. In his take, they are part of the problem.

The same pattern happens all the time in investing. The backers pointed at other people who they felt knew what was going on. Rupert Murdoch pointed at Larry Ellison and called him a genius. Larry Ellison pointed at George Shultz and called him a genius. George Shultz, his grandfather, pointed at Channing Robertson and called him a genius.

Channing Robertson was the kernel of credibility t

Ed Zitron says the AI labs, the chipmakers, and the data-center landlords are renting and investing in one another. Jon Stewart asks if the whole buildout is circular, and Ed Zitron says it is.

The labs rent compute rather than own it. Anthropic, he says, will be paying about $3.1 billion a month to Elon Musk as of December. The labs lose billions of dollars, which makes banks uneasy about lending to them, so the labs lean on hyperscalers instead. Larry Ellison is building about $400 billion of AI data centers for one customer, Sam Altman, who is supposed to pay about $300 billion over five years. Ed Zitron says OpenAI does not have the money and Oracle does not have the capacity. NVIDIA in

Ed Zitron says Oracle's stock is tanking because a $300 billion, five-year contract with OpenAI has nobody who can pay for it.

Oracle's public relations is phenomenal, and people say Oracle is doing great. Oracle's revenue has been flat for 15 years, adjusted for inflation. The only part of the company growing is AI compute, which is destroying margins because it costs so much to buy and takes so long to install. Larry Ellison's idea was to build endless compute for OpenAI, a company that loses billions of dollars. In September last year, Oracle announced the $300 billion five-year contract. Analysts went completely nuts and called the contract amazing. Then everyone asked whether Oracle ca

Kevin usually puts the probability that it all goes super bad at about ten percent. In most of the world that sounds crazy. In the city he is describing, the same ten percent makes him an optimist, because he knows people at fifty, sixty, and seventy percent, and someone at ninety-nine point nine percent. He says people still have agency, are not in the recursive self-improvement loop yet, and still could slow things down, pass some regulations, and coordinate to pace the frontier.

The new podcast with NPR is called Machine Gods. It begins the week of October 19th and will cover the week's news plus interviews with people in the industry. NPR reaches people who would not choose a tech podcast.

Hard Fork was owned by the New York Times. The people who built Hard Fork wanted to build something for themselves. They have started a company, made hires, and are going to spin up a little media company.

Ten years ago, when the book starts, there was no such thing as real AI. In 2016 the leading chatbots were very bad, and the voice assistants of that time did almost nothing valuable. Systems now solve century-old problems in math and science, build entire software programs, and pass graduate-level courses. The people who believed in AGI, a system that can do everything the human mind can, were fringe weirdos in San Francisco. Peers in academia and industry had mostly ostracized them. The progress was not a surprise to the people building the technology.

Oracle's value shot up last fall during an AI boomlet and made Larry Ellison briefly the richest man in the world. The fortune has been cut in half, so he is now eighth. Larry Ellison still put tens of billions of dollars into the Paramount and Warner Brothers deal, now called Skydance.

Oracle owns 15% of TikTok. The stake is no larger than the stake held by Silver Lake or by Andreessen Horowitz. ByteDance keeps a huge stake. Oracle is extremely defensive about any suggestion that Oracle influences the algorithm. Tom Dotan says it would be pretty difficult to move the algorithm so that it directly surfaces pro-Israel content.

Larry is close to Netanyahu. The day after the deal was signed, Netanyahu told influencers that social media is the number one tool and that TikTok is the most important thing to pay attention to. Larry is close to people who believe TikTok is a valuable weapon in propaganda wars Israel is focused on.

Peter Kafka says Oracle sells technology to other technology companies, which is a way for Oracle to be involved with TikTok. Tom Dotan then says Oracle's cloud computing business hosts TikTok's algorithm and is responsible for the security of the algorithm, and calls that a good business to have a piece of. When TikTok in the US came up during the first Trump administration, Microsoft wanted a piece of TikTok. For a time, Walmart and Oracle were going to own TikTok together. Tom Dotan says there are legitimate business reasons to want a piece of TikTok.

David Ellison wanted to combine traditional media companies and scale them to compete with Netflix, Amazon, or YouTube. David Ellison had the money to try because of his father. Redbird is involved and the deal uses a huge amount of debt, but the money is Larry's.

The piece suggests Larry Ellison did not spend much time raising his first two children and tried to make up for it by bankrolling them in Hollywood. Annapurna Studios made well-respected movies and was a financial disaster. Larry Ellison is now doing the same bankrolling for David Ellison. Larry Ellison is not a media person, and Larry Ellison has conflicted feelings about how involved he was with his children.

A grand plan would be easier to understand. People like the Murdochs buy with the intent to control vast media empires, and Elon Musk bought Twitter in part to use it politically. Larry is close to Elon, and Oracle holds a 15% stake in TikTok, so the purchases can look like one project. The reporting found interests and politics, and Tom Dotan says he does not see a project spanning administrations or generations.

Peter Kafka opens the episode by calling Larry Ellison an 82-year-old billionaire and one of the 10 richest men in the world. Larry Ellison bought his son, David Ellison, a media empire. The companies were once called Paramount and Warner Brothers. Peter Kafka says they are now called Skydance.

Peter Kafka also calls Larry Ellison the eighth richest man in the world, tight with Donald Trump and Elon Musk, and connected to both TikTok and a traditional media conglomerate. He says the public does not know that much about Larry Ellison.

David Senra reads Larry Ellison's case for bravado. He does not apologize for confidence and bravado, because that confidence and bravado make for better leadership. You cannot lead if you are filled with uncertainty.

Picture two officers, each leading a company of Marines up a hill. The first tells the men they are going up the hill and are going to kill every enemy soldier on the way to the top. He is going first. He has not lost one of them yet, and all of them are going to make the top with him. He is cool, competent, and confident. The second admits he does not know how many enemy soldiers are on the hill and has never really done anything like it. He will go first if they follow, but

David Senra reads Larry Ellison's case that Oracle needs an enemy: the company is always at its best when it has an enemy to go after. Oracle picks its enemies very carefully because an enemy helps the company focus. Oracle cannot explain what it does unless it compares the work to someone who does it differently, and it cannot tell whether it is gaining or losing without constantly comparing itself to the competition.

Ellison repositioned Oracle so people compared it with two of the most successful companies in the technology industry instead of with other database companies. Steve Jobs said the thing that really bothers him about Microsoft is the tasteless mediocrity of the software, not

David Senra reads Larry Ellison's refusal to look at a senior manager's 200 budget slides until four basic questions were answered. The account he reads has Ellison seeming to find glaring inefficiency, wastefulness, and intellectual sloppiness whenever Ellison looked inside Oracle. A prime example was the Energy Center of Excellence, meant to showcase Oracle software for the energy industry. Plans called for millions of dollars to run the center. Next year's energy software sales were forecast at $10 million, against $5 million to run the center, and Ellison asked whether anyone else found a forecast of just $10 million in sales beside $5 million for the center strange.

More complexity and

David Senra reads Larry Ellison's reason for picking Microsoft as the enemy: he set out to stop people talking about Oracle and other database companies and to get them talking about Oracle and Microsoft. A smaller database company would have put Oracle in the wrong category. Ellison told people to compare Oracle with IBM and Microsoft, the class he wanted. He gets attention by picking a fight, and he is most focused when he has something to beat.

Once a customer committed to a database vendor, the customer was pretty well locked in for the next 10 years or so, and Ellison understood the lock-in right away. With a winning system like Oracle's database, he did what Jeff Bezos did at Amazon i

David Senra reads Larry Ellison's refusal to sell Oracle equity. He loathes selling it, and in 1991 he still refused while Oracle's stock price was dropping and the company was almost running out of cash. He kept searching for unusual ways to raise cash without giving up his place as Oracle's dominant shareholder.

The most urgent problem was Oracle's dangerous cash crunch. A conventional financing solution would only have been available on punitive terms that would undermine his position. One employee's mission was to get around $200 million while giving away as little Oracle equity as possible. Instead of surrendering equity in Oracle to pay off the banks, Ellison secured an $80 million lo

David Senra quotes Larry Ellison saying he had to save Oracle to save himself. Ellison could not run away. He had managed by abdication: he was interested in the technology, and if he was not interested in sales, accounting, or legal, he simply ignored it.

Fifteen years of running the company had not stopped the mistakes. Very few people work on anything for 15 years. Keeping legal and accounting organized as separate control functions could have avoided a lot of the problems. A company cannot run without strong checks and balances. Ellison was doing only the work that interested him, the same problem he had in school, except it happened in his 40s.

He hired really smart people and assumed

David Senra reads the account of Oracle's biggest crisis: it hit in 1991, and the company almost went out of business.

The blowup combined a massive accounting and sales crisis, aggressive sales practices, premature revenue recognition, overexpansion, and deteriorating product quality. Sales teams booked multi-year contracts upfront and recognized the revenue immediately for software that would not be delivered or paid for for months or years, and in many cases was never paid for. The books held what they call phantom revenue: Oracle was recording sales that did not exist. When earnings had to be restated, the stock price dropped by over 80%.

Larry Ellison wanted farmers, not hunters, in a