# Oracle's Debt-Fueled AI Pivot and Ellison's Legacy

**Podcast:** Better Offline
**Published:** 2026-10-21

## Transcript

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From Pushkin Industries, I'm Jonathan Goldstein, and this season on Heavyweight, Jenna wonders why her foster family promised to adopt her, but then never did.
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Hello and welcome to Better Offline.
I'm your host, Ed Zitron.
On August 17th, 1944, the Allied forces pushed Germany out of the south of France, and in the Bronx, a child was born that would go on to become one of the most leathery and ghoulish software orcs in the history of capitalism.
I am, of course, talking about Archdemon and Oracle founder Larry Ellison, and today I'm joined by Tom Dutton, a wonderful writer who just had a piece published about this vile old fart in Vanity Fair.
Tom, how are you doing?
I'm doing great, Ed.
I really like that X-Men-style Magneto intro to Larry Ellison.
Yeah, he's like Magneto, but he kind of attracts bad debt at the moment.
I was about to say, yeah, exactly.
His superpower is a magnet for debt.
It's acquiring companies because it's funny having you on to talk about Oracle.
This is one of my favorite and least favorite subjects because I spent really the last like 10 months digging into this company here and there, but I'm mostly on the financial side.
And the thing that keeps popping up is this is a very strange company.
Like they have...
I think they may be one of the most aggressive stock buyback companies in the world ever.
Yes, yes.
Very much so.
They've been doing it for – I can't stand up that particular superlative.
We should look into it.
It's $190 billion or more since inception, which isn't the most that anyone's bought.
But I think as a percentage of overall revenues and such, it's one of the highest ones.
Yeah, absolutely.
And it's a key part of their strategy as they've been basically using their excess cash to buy up stock and keep Larry Ellison further and further into control.
I mean, that's been a major part in why their stock has been able to be – you know, even relatively flat during the years that the company was basically floundering.
So yeah, it's key.
Yeah, it's a strange company.
So how did we get, what is the actual founding story of Oracle?
Because I know that they, I've read vaguely that they worked with the CIA, but how'd this get going?
All right.
So basically what happens is Larry Ellison comes out to California in the 1960s.
He's a college dropout, sort of a layabout bum.
moves out to San Francisco with no real plan in mind.
I think he's like a river guide or something in Yosemite for a couple of years, but he has a chip on his shoulder and dreams of being rich.
This is extremely important to him from an early age.
Uh, and he kind of falls in with the burgeoning Silicon Valley crowd of the era.
So this is like a, you know, a cohort that produces Steve jobs and Bill Gates and Steve Wozniak.
Um, and Bill, sorry.
And Larry is a self-taught programmer.
Uh, he works for a couple of.
early early days software companies i'm not going to remember all of the names but one of them has an internal project working for the cia uh providing a database basically larry is very into the plumbing and database side of things which was quite boring at the time right it wasn't really extremely boring right yeah i mean you have people sorry what were you saying no just keep going yeah so you have people like steve jobs who are interested in the proliferation of personal technology and bill gates who's interested in I guess, I don't know, licensing software, but more or less the same kind of consumer approach.
And then Larry is taken by this concept of the relational database, which in very simplistic terms is basically about how you can connect one piece of data to another.
And we're about to have an explosion of data as all these companies start collecting customer and other sort of specific data into these mainframes.
And Larry makes this bet that databases are going to be the future of how businesses are run.
And so he's working for this company and their first client or one of their biggest clients is the CIA and the internal name for the project of, um, the CIA software contract is Oracle.
Um, so that's where the name comes from.
He leaves that company and then he starts his own.
It doesn't, it isn't initially called Oracle, uh, but years down the road, it does take that name and, and their first client, the company that later becomes Oracle, their first client is the CIA.
Nice.
Okay.
Right.
Nice.
So really like nice beginnings for this company then.
And how did it grow?
Was it through government services?
Was it just because databases were actually a necessary tool?
I think you could argue it was a great business at the time.
I mean, someone needed to provide this service.
There were about to be an explosion of kind of hyper-targeted, not really targeted, but businesses were just trying to make sense of what they could do with the fact that technology was able to suck up.
transaction data or other specific things.
And they were really the best game in town doing it or the most aggressive game in town.
And Larry, to his credit, is a technologist.
And he sort of understands the direction of where the Silicon Valley ecosystem is going.
Databases are a huge part of it for a lot of years.
And they were one of the most effective games in town.
Also ruthless.
They have huge fights with Microsoft in the 90s.
He and Bill Gates are...
tremendous enemies later friends what do they argue about what are they getting at each other's throats over well basically they were moving in on each other's business you know like microsoft is you know bill gates is one of the most rapacious competitive insane people that you know the business world has ever produced and microsoft could only get so big just by selling windows and and you know office productivity tools to people uh and then you have um you know larry ellison who wants to own all aspects of the customer relationship and it was just straight up you know two two competitors going at each other but it was also very personal yeah the whole industry also just has never really liked him that's this is not well i mean yeah the answer is yes uh but yeah it seems that larry has kind of pissed off just about everyone including his customers over the years as well Yeah, I mean Oracle is an infamously customer unfriendly company.
It's sort of baked into their DNA is that they don't really give a shit about how much they can upcharge their customers because they have complete lock-in from them.
And I mean we can talk about this if you're interested but one of the interesting kind of diversions in you know the direction of software in Silicon Valley is that Mark Benioff is an early Larry Ellison acolyte.
Oh really?
I actually didn't know that.
Yeah.
Yeah.
No, I mean, there were, you know, Benioff was really kind of the prodigy salesperson.
He's a pure, I'm saying this in the nicest possible way.
He's a salesman.
He knows how to kind of pitch something in a compelling way to businesses.
And, you know, he's obviously become this quasi cult, like, you know, Hawaiian infused figure in Silicon Valley now, but the sort of genius, if you want to call it that of Salesforce, which is, you know, something that Oracle invests in and Larry and Mark have this on again, off again, friendship.
is that what if we built a company that sold to other businesses that didn't hate them?
What if we actually had at least the appearance of being concerned with their satisfaction with the product?
As opposed to, I've heard Oracle referred to as a law firm with a software company attached.
Yeah, absolutely brutal.
Nobody really loves it.
The software I hear works pretty well.
Like I give them maybe some credit for the fact that no one has displaced them with maybe a better product.
Well, I'd actually push back on that.
There's an Oracle story where they nearly bankrupted the town of Birmingham because of the amount of money they were spending on trying to fix Oracle.
But I mean, this is kind of typical of the greater Silicon Valley.
We don't need to get too sidetracked, but it's kind of typical of the overall Silicon Valley experience at the moment.
Yeah, yeah.
And Oracle never really changes course.
Their guiding philosophy for many years is we own these customers on this particular aspect of the relationship.
So why would we change what we're doing?
We have them by the balls.
We can keep upcharging them.
They're not going to be able to really go anywhere else because of vendor lock-in.
And it's not an amazing business, but it's a very solid one.
And they're able to kind of make it through various upheavals in the tech industry like the dot-com bust.
you know, and the rise of cloud, which we can also talk about, but effectively they're just entrenched as part of the plumbing and it's a profitable software business.
And that's like a pretty good place to be.
But it's never been like a rip roaring company, has it?
There's this kind of mythology I've heard, like even in interviews with me where people say, oh, they're one of the most profitable companies.
It's not necessarily true.
It feels like they've just chugged along without dying.
Yeah.
Yeah, I think that's right.
Look, they have software margins, which is one of the great innovations of Silicon Valley is that you can basically with very little capital, until recently, capital expenditures charge people on an annual basis for your product.
And it's pretty cheap to do it.
Oracle is able to, you know, once they get their financial house in order, they have a real catastrophe in the early 90s because their books were just shit.
They could not keep them together.
And I mean, I don't honestly remember all the specifics of it, but the company nearly goes bankrupt because they have just not been properly accounting for their revenue.
I think it's the easiest way to put it.
I did not know that.
The 90s were crazy, man.
Yeah.
Yeah.
Early 90s.
I actually didn't know that Oracle nearly did that because there's so much, there's so many fun stories that happen with this company, but they mostly start in the 2000s in my experience.
Yeah, no, a hundred percent.
I mean, look, the 90s were an odd era within tech generally.
But when you get to like the late 90s, the rise of dot com and, you know, generally the way the internet is upending a lot of these businesses, you see a huge panic among you know all the entire cohort of silicon valley but what oracle basically does during this period is decide to just buy companies they're not very innovative they're not really developing new products and they go on this huge spending spree they bring on you know this this pretty clever banker safra cats who i'm sure we're going to talk about safra cats Yeah.
She comes in.
She was a banker.
She comes on to be their CFO and basically leads them through this years of acquisitions.
And so they end up buying Sun Microsystems, which was very upsetting to a lot of people in the tech industry.
PeopleSoft was a huge fiasco because they fought it and it became a hostile takeover situation.
And when they acquired Sun Microsystems, they immediately.
But it was like a couple months later, filed a suit against Google claiming that its patents were infringed.
Yeah, I actually don't know that particular story, but sounds right.
Sounds like Oracle.
Well, actually, while I have you, though, I want to tell my favorite Safra Katz story, which I know I messaged you, but I need the listeners to hear.
Yeah, let's do it.
In the late 2000s, Oracle hired this disgraced HP executive called Mark Hurd.
And to kind of simmer down the story Mark Hurd had, it appears, allegedly, etc., legal disclaimers.
repeatedly tried to use his position at HP as a senior executive to have sex with a former reality TV star, hired her for events, would get a little touchy-feely, real gross piece of shit, get shit-canned from HP, and by the way, the...
Terms of the reasons are because he used HP's funds to do something that wasn't HP related versus the horniness of it all.
Larry Ellison writes a letter to the New York Times saying this was tantamount to Apple firing Steve Jobs in the old days, and he'd go on to hire Herd as president.
So a few years later in 2014...
six hours before an announcement saying that he and Safra Katz would be co-CEOs of Oracle, Katz turns to Herd and says, going to Adam Lashinsky of Fortune, that he would not live long enough to regret getting between Larry and her or attempting to unseat Larry.
Five years later, Herd dies of cancer, making Katz the sole CEO of Oracle.
And just to be clear, fuck Mark Herd.
Like, you don't have to agree with me, Tom, but I think he's a piece of shit.
It's good he's gone from the world.
Fuck him.
Nasty little pervert.
Anyway, that's who Larry Ellison was backing.
But back to Safra Katz.
Yeah.
No, no, listen.
And like you said, Mark Hurd does die of cancer, which is tragically, if you were sympathetic to the guy, a big theme in Larry's life.
A lot of the people that he's closest to do end up dying.
But Safra Katz, you know, she comes in.
She was a banker at, fuck, I can't remember the name of the banker that she was at.
I'm going to look it up real time.
Yeah.
I'm going to look it up.
Yeah.
So she's a banker.
She comes in to basically manage this acquisition era of Oracle.
We mentioned Sun Microsystems, which is effectively a bid to acquire the language Java.
They buy PeopleSoft, which is incredibly messy.
PeopleSoft fights it, becomes a hostile takeover situation.
anti-tred the department of justice gets involved it takes 18 months they end up buying the company they win they fire a huge percentage of them um they go on to buy a couple of years later cerner which is a health tech uh health records company which that was 2021 took on a bunch of debt and has actually been kind of a catastrophic one because it was so expensive complete catastrophe.
It's mostly a Larry passion project, which we can also talk about, but yeah, those are the acquisition years of Oracle, which does keep the company growing to a degree, but their products don't really evolve in a very big way.
And then In the next couple of years, cloud takes off.
You have the cloud boom in the 2010s.
And Larry is very dismissive of this technology.
He calls it, you know, basically the tech industry is basically no different than women's fashion.
He said it was gibberish.
And it ends up really fucking the company for a period of time.
I also can't get over that it's like women's fashion.
First of all, this man has five divorces.
He probably should know that there's real money in that.
But on top of that, what the fuck is he talking about?
Well, yeah, he just was flat out wrong.
I mean, there's just no, there's no way around it.
There's no debating, you know, what happened during this period because you have relative pipsuite companies like, you know, at least on this front, Amazon and Google and, you know, Microsoft is floundering during the Balmer years in this era.
being the huge winners of the hyperscale cloud computing world and oracle which by every means had the customer relationships had the cash to be able to fund it just fumbles it fumbles it really really badly um and so they lead the way for multi-trillion dollar companies to come out of this revolution and oracle is just kind of bumbling along buying back its stock and squeezing its customers its database customers so it's like absolutely a dark period that you know mark hurt is the ceo and suffer cuts um you know is is alongside there um and they're just not a company people pay that close attention to until obviously the AI boom.
So just so I'm clear, I just really want to like make sure I've got this clear.
So they did, from what I found, $190 billion of stock buybacks.
And this allowed Larry Ellison to consolidate his shares because he would, he had massive, he has like 40 something percent of the company now.
And that's up from what a decade ago and it's like 20 something?
20.
I don't have the exact number in front of me, but yes, in the mid 20s.
Something like that.
and goes up to 40.
I mean, it is as for a company that's worth $400 billion.
I mean, you have, you know, huge ownership stakes and private companies, but for, for a $400 billion company, that's publicly traded to have a single person owning 40% of its shares is, is almost unprecedented.
Um, you know, I was talking to an analyst who has been covering the company for decades and his line to me is like, it's basically a publicly traded private company with Larry in complete control.
And that's crazy as well, because if you look at, If you look at the kind of revenue of Oracle, adjusted for inflation, it's flat.
I've looked this up myself, which is so crazy, and there's so many crazy things about it.
But it's flat, and the company has been sinking tens of billions of dollars into buying back its shares, mostly to benefit one leathery man and his large, wet son.
Yeah, more recently that.
But I will to Oracle's defense, the cash that they spent buying back shares.
it's you could argue it's decently well spent i mean they were buying these shares that i don't remember the exact price but let's say it's in like the 20s or 30s you know the stock is trading at 130 um you know 130 140 dollars now there's other ways you can use this cash obviously but just on a pure financialization basis i don't think that many people are upset you know that their cash was going toward buying back shares it did prop up the stock i mean it propped up the stock but that money could have also gone literally anywhere else.
Also, it propped up the stock for one stockholder.
I mean, we're just debating whether Larry Ellison's a good person, which we both know he is.
Just kidding.
But it's, I don't know, I just, everything I read about this company and this man is so peculiar, because in your story you mention as well that he also has his kind of own private financial situations.
Like he's, from my count, he has, what, at least 21 billion, if not more.
dollars in personal loans and yeah i don't know the exact number but the thing about there is to pay for his life yeah yeah i mean look larry like most almost every billionaire out there doesn't actually spend his own money you know he doesn't sell off his shares in fact and again we can talk about this there was a very very bizarre moment a couple of weeks back where it looked like larry was potentially going to offload billions of dollars in oracle shares which he hasn't done in decades and ends up pulling it back a couple of days later and i'm still trying to dig into what what happened there because it was very, very weird.
But I mean, what from just to explain for the listeners.
So a couple of weeks back, there was an announcement that Larry was going to dump not eight or $9 billion worth of shares.
And then within one day, it was actually 7 billion.
And then within one, one day, because everyone went, excuse me, what the fuck was that?
Larry, what you, what you doing with those shares?
Uh, they pulled it back and now he's doing another margin loan where he offers the shares up as collateral, which appears to be, how he usually does business.
Like, Mad Larry doesn't tend to sell his shares.
No, no, he's very much like many other billionaires uses his collateral to, you know, to get margin loans and fund his lifestyle and passion projects.
And as I reported out in the story, there's a really interesting shareholder lawsuit that happens in the 2000s where you actually get a glimpse at his, you know, internal finances and the tens of millions of dollars that he spends on, you know.
his yachting excursions and everything to do with his yacht racing, his personal life, his real estate.
I mean, the guy is one of the most prodigious holders of properties around the world.
Yeah, he owns an island.
He owns an island, which I definitely would love to talk about.
And his poor head of his family office, this guy named Philip Simon, who's kind of a beleaguered figure in the Larry Ellison universe.
There are emails that come up in Discovery in the shareholder lawsuit where you see Simon basically begging Larry to rein it in.
He's like, we have, I think the phrase is something like a freight train of debt headed toward us right now because of all of his spending.
And what was he spending that money on?
Personal was the category for a lot of this stuff.
Yes, but what kind of personal?
Well, look, I think...
Boats?
Boats?
Certainly boats.
Certainly boats and yachting and real estate, I would say, are the easiest things to look to.
There's obviously the stuff as his children get older, two of his children get older and become very interested in...
Well, he has seven of them now, but he has two from his third marriage to Barbara Booth, who was an Oracle receptionist.
And that is Megan and David, who are both very much figures in Hollywood.
And then with his sixth wife, Joel and Jew, he has five very young children who he had in his late 70s to early 80s.
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Damn, my man's fucking, I guess.
I mean, that's the first time anyone said that on a podcast about Oracle.
But I didn't know he had another elder child.
like a yes like it yes so we all know david i know about david mr normal looking but i didn't know about meg oh megan is fascinating to me i actually honestly between you and me ed i find her more interesting than david um she's the more kind of like shakespearean figure of the two um so Both of these guys want to go into Hollywood as they grow up.
Larry is not involved in their life early, early days.
He's always on the go making Oracle into one of the greatest Silicon Valley companies of all time.
And later on, both Megan and David decide they want to be big time Hollywood producers and moguls.
Megan is more interested in Oscar bait.
She really likes kind of prestigious art films.
And so she starts this company called Annapurna Pictures, which maybe you've heard of.
I have not.
Okay, okay.
So they make a bunch of movies in the 2010s like Zero Dark Thirty, The Master.
She's very close with Catherine Bigelow and funds a lot of her movies.
Detroit was one that was an Annapurna picture that was actually kind of disastrous for them.
She owns the rights to the Terminator franchise.
I actually didn't know that.
I'm looking at the Wikipedia as we speak because I just learned that this person existed.
This woman's actually been around a bit.
She produced Zero Dark Thirty.
Yeah, yeah, yeah.
Between the two of them, I think if you're a movie lover, you have a lot more respect for Megan because she's really making a go of it.
I mean, she's actually made movies versus whatever it is that David Ellison did.
David makes Tom Cruise movies, right?
I mean, like, you know, Skydance was making its name co-producing the later Mission Impossible movies and it makes Star Trek and things like that.
Oh, God, he actually produced Mission Impossible Fallout, which I liked.
What are you going to do?
I just feel like I stepped in something, Jesus Christ.
So he was out of their life, but he just came back into it.
Was he fully estranged or was he just off doing whatever it is he does all day?
Yeah, I think more of the latter.
I mean, he does have a relationship with them.
There's a huge amount of guilt he feels over the fact that he wasn't there.
And I really think.
Yeah, I mean, look, who's to say what lives inside the mind of a man?
I actually think if you look at the completely, I would argue, insane money that has gone into Skydance's buying spree in Hollywood and the likelihood of any of this turning up into a successful mega conglomerate media company, I think a good amount of it, and this is coming from friends of Larry's and people who've worked with him for decades, say that it's driven by what he says is like a, you know.
paternal obligation to his children and a decent amount of guilt over sort of not being there in their early years.
Because I admit, I've been trying to work out why...
Because at this point, it's reasonable to argue that Larry Ellison is endangering his future with this Skydance deal that he had to...
And with AI as well.
And I mean, I really must be clear, I think this man is an evil gremlin.
I, on a personal level here, not putting words in your mouth, I think he's a dark figure.
I think he's connected with Netanyahu, like a really genuinely evil guy.
But it's straight, I was wondering why he would do something so illogical with this.
And if the answer is he truly loves his big wet son, that's genuinely one of the funniest possible ways this could go.
Because- I mean, but isn't that always the case?
You know, with these billionaire scions.
Like, not really.
Like, I think that there are plenty of rich people who don't give a shit about their kids and would leave them on the floor screen.
I mean, Steve Jobs.
Steve Jobs, classic kind of a child leaver.
Like, the Behind the Bastards episode where we did, God, back when I started Better Off Lights, like, he refused to pay child support to the point that the California DA sued him.
Yeah.
So, I mean...
Weird that Larry Ellison is less of a deadbeat than Steve Jobs.
Interesting.
I'll put him on the ranking board.
Yeah.
Yeah.
I mean, these people, for whatever reason, contain layers.
I don't want to come down one way or the other on whether or not Larry Ellison is a good or bad person.
I don't think it's possible to, but I already have.
Yeah, yeah.
Okay.
I'm not here to convince you, but look, the Hollywood stuff, I think, is super fascinating right now because, and I'm just going to state it outright, and I make the case reported out in my story, the man does not give a fuck about the movie industry and the entertainment industry.
He never has.
There are people in Silicon Valley who have.
Steve Jobs, for example, he co-founds Pixar.
He is very close with Bob Iger.
He's someone who thinks a decent amount about the music industry, and even though he ends up kind of destroying it.
This is a guy who cares about media.
Larry never does.
He doesn't even care about news.
And everything that's going on now with Skydance and CBS News and now CNN, people are trying to attach to this Larry Ellison worldview and he's in the midst of a political project.
I didn't find that in my reporting.
I think it's a much more interesting story.
Yeah, go ahead.
How did you come to the conclusion he, Larry Ellison, doesn't really care about it?
Because I'm very curious about this.
Well, look, let's...
put things i'll be somewhat measured with this with this the guy is increasingly conservative um he's very influenced by elon musk he obviously is a huge supporter of the state of israel and and is close to netanyahu he has his biases so the fact that cbs news is tilting they say towards the center but obviously with barry weiss in there it's pretty clear what's going on i don't want to claim that that is not in any way a reflection of his politics That said, the guy is not Rupert Murdoch.
And I don't think it's a huge mistake to think of him in that way.
He's not a newsman.
He's not sitting there saying, and now I will make my big wet son by CNN.
And once my wet son has his hands around it, I will twist this to the pleasure of Donald Trump.
You don't think that that's really what's driving him.
I think it's a tertiary, if not below cause and what's going on here.
I think with David, he believes he.
has a vision of turning, you know, this consolidated media company into, you know, a great competitor to Netflix and YouTube.
And if we can just kind of stack all these brands together, we can really compete on scale.
He's a Tom Cruise movie guy.
He doesn't care about news.
I think this whole thing is a huge nuisance to him, frankly.
Everything with Barry Weiss.
To be clear, though, they are obvious.
They are definitely right-wing people.
Like, just got to be clear about this.
But Is this based on discussions with sources?
Is this the kind of feeling you've got?
Yeah, yeah, it is based on discussions with sources.
Fascinating.
Now, to be clear, I wasn't questioning you.
I'm like, I want people to hear this because there's a lot of anxiety, understandably, about the big wet son and his right-wing views and that this might be a kind of Elon Musk-style takeover when it sounds like it's a rich dad buying his wet son a big thing and his wet son wanting to be kind of a...
A media magnet, almost.
He wants to be big like his dad.
I think he sees his billionaire dad having, you know.
Oh, that's so sad.
Yeah, yeah.
And, you know, there's a fascinating moment, and this kind of ties a lot of different themes together.
So Netanyahu is embroiled in scandal.
Obviously, never not, but there's a corruption scandal and investigation that's going on in Israel.
2015-14 or so.
And Larry is ensnared in this because there was a period of time… How was Larry Ellison ensnared in an Israeli corruption scandal?
Yes, yes.
Because he's close to Netanyahu.
Safra Katz plays a very large part in that.
She's an Israeli-American and extremely right-wing.
There's no shortage of evidence to see that she is someone who… Anyway.
we can talk about software more if we want but this this netanyahu situation he tries to convince larry uh to buy a newspaper that is run by one of his adversaries um i don't remember the exact name of the newspaper but they're writing all this about netanyahu and he tries to get larry to buy it for him and make it more favorable and larry basically tells him no and ellison larry tells the investigators the israeli investigators that are looking into this corruption um i told him no because i am a technology executive i am not a media executive i am not interested in that business and so you see from again a relatively early stage in his kind of right-wing evolution he's not he doesn't believe in mainstream media he thinks twitter is the truth the light in the way he gives a billion dollars is that a quote No, no.
That's, I think, what the Korean church used to say outside Los Angeles.
I mean, same, same.
Yeah, okay.
Yeah, yeah.
Yeah, yeah.
No, he's, no, but he believes that Twitter is the only source of truth.
That is a more or less direct paraphrase from several sources.
That's so fun.
I love that.
Yeah.
So, he's quite close with Musk, isn't he?
Mm-hmm.
Mm-hmm.
Yeah.
Elon's come out to Lanai several times.
There is...
Rumors, I have not corroborated them myself, that Larry brought Elon out to Lanai to help him get dry off ketamine.
Can you imagine the conversations that those two have?
Actually, one of the things, talking about conversations, Larry Ellison, the thing that always surprised me was he looks like he's going to be a little fella with a booming or gremlin-y voice, but he's 6'1", and he sounds like this.
Sounds very soft-spoken for the man I thought he'd be.
Yeah, I don't know what to his voice.
I have talked to Larry once in my life, and that does put me in relatively rare.
Yeah, I'm surprised he told us to journalists.
He doesn't, he hasn't talked to journalists in a long time.
There was a Forbes piece that came out during the pandemic, where they talked about, you know, his, some of his health initiatives that he's very into.
And also, they mentioned this farming initiative on lanai, which I wrote about at the Wall Street Journal, he was trying to reinvent agriculture.
and create the tesla of agriculture on lanai but anyway i was doing when i first joined the wall street journal i was doing a story on benioff actually because there was a period in 22 23 where there were all these activist investors that were piling into salesforce trying to force this company to increase its margins and benioff is sort of a master at manipulating the press or at least developing a kind of chummy relationship with them and so as i was doing this piece benioff basically weaponized his rolodex to get all of his famous friends to call me um and tell me how great of a guy he is that's so funny yeah yeah no in a probably 10 minute period of time i got texts from gavin newsom and yo-yo ma and he offered to introduce me to jared kushner but yo-yo ma yeah yeah Yeah, I love that the billionaire said he's a big Davos figure.
So I didn't know he was like But that's also just who else called if you remember or is it just those two Michael Dell called me Wow Andy Jassy was supposed to call me but they ended up just giving me a statement I can't remember who else was on that list.
I don't have those emails anymore since I left the journal but it was classic Benioff.
You know, he's, he's, he's a real, unlike Larry, you know, Mark really does like, you know, cavorting with that class of people and, and then developing relationships with them and, you know, doing each other favors, but anyway, but yeah, yeah, I get what you mean, but keep going.
Anyway.
So, so one of the people that, that he gets to call me is Larry.
And I took the call of like, I don't know, 5 30 PM on a, on a weekday.
And The thing I was really struck by is the guy was probably 79 at the time.
He sounds so young.
I just couldn't believe that he was the age that he was.
I mean, I don't know what to make of it.
What does sounding young sound like?
He doesn't have like a kind of gravelly sort of Tom White husky voice or the sort of, you know, you hear Rupert Murdoch kind of, you know, like when Murdoch talks, he kind of just sort of barks and grumbles.
Or the Dershowitzian kind of.
Yeah, he doesn't really.
He looks like he should.
He looks like he was born with it.
But he has this kind of remarkably smooth kind of.
He sounds like a guy that would be like a children's social worker.
Sure, sure.
Well, he has enough children to cut that.
Yeah, I guess that is part of the business.
But you know what?
Let's change gears.
I want to know about this goddamn island in Hawaii.
Oh, Lanai.
Lanai.
I am fascinated by Lanai.
I've been to Lanai three times.
Nice.
which is a lot of times considering I've never once stayed at the Four Seasons, which is the main reason people go to Lanai.
So Lanai is one of the larger islands in the chain of Hawaiian islands.
It has been owned by one billionaire corporation or individual billionaires for the entirety of the 20th and 21st century.
It's owned most prominently by the Dole Fruit Company, which turns it into the world's largest producer of pineapples.
Dole gets...
bought out by private equity and this real estate magnet named David Murdoch, who runs the island horribly for 25 years.
It gets hugely in debt.
He has to sell the island after the financial crisis in 2008.
And Larry sort of comes through to buy this island.
And he's owned it since 2012.
And it's a fascinating thing to go to a place that is, you know, in a modern American state, a company town.
But the fact is, Larry and his holding company called Pulama Lanai own 98% of the island.
So almost every single business pays rent to Larry.
And are there residences there, I guess?
There are some people who own their own homes, and so they have private residences.
But by and large, the largest employer on the island is Larry Ellison.
Nice.
both the four seasons that are there there's a small boutique hotel called hotel lanai um he has built multiple houses and compounds for himself on the place uh i wrote about this in the story but there's this most recent compound it took multiple years to build he hires these japanese carpenters who build it in the traditional joinery style um he houses them on the island yes sure he houses them on the island for a bunch of years while they're doing this i mean he runs it like I think I wrote in the story that the previous owner of it, this guy, David Murdoch, he kind of ran it like a, you'd imagine a billionaire, kind of an arbitrary dictator, sometimes cruel, sometimes generous.
Larry basically runs it like a god.
I mean, he's so rich that if he decides that there needs to be a new housing complex to provide for the people there, he can basically make it happen.
So is he well-liked by the people of Lanai?
This is going to be disappointing for you, Ed, but the answer is yes.
Right.
Tell me more.
Yeah, I would say it's a reserved yes, because the fact of the matter is, look, he's built housing for them, which is something that they need more of.
He has built various amenities.
He reopened a pool that the previous owner had closed.
The most recent addition is this bowling alley that he, I think it was formerly a community center that it was converted to a bowling alley.
um the again aspects of his personal life kind of bleed into the infrastructure there so he turned this dilapidated movie theater into what apparently is one of the nicest movie theaters in the country um largely to play the movies that his children are producing i was gonna say is this yeah this is line of yeah it's one of those things where there are benefits but they're mostly ancillary to the larger thoughts of ellison It's hard to know where one ends and the other begins.
It's weird to say it could be worse than Larry Ellison, but that is not necessarily saying he's amazing.
But I'm not disappointed by it.
It doesn't surprise me because, especially for an island, I imagine there's a certain degree of he does have to keep them pleased because...
At some point, you're going to have to either turn that into a police state or appease people, which I'm surprised he didn't just do that.
Well, I mean, the police state thing, I don't know.
There's not too much police there to begin with.
It is a very strange place.
That's kind of what I'm getting at, though.
I'm surprised he didn't just have like Larry force.
Yeah, well, funny, funny you bring that up because there's a pretty funny story from a couple of years back where, you know, Larry is always zipping around the island on his, his Corvette, his Stingray, this kind of bright orange car.
You can, you can Google it.
And he actually got a ticket once.
What?
Yeah.
Yeah.
Look, that went up to Hawaiian press was all over it, but some.
The enterprising police officer saw a guy going, God knows how fast, on their very windy roads, and they pull him over and they see that it's Ellison.
And I think he gets the ticket and writes it.
And I don't know what happened to that cop, but I guess there's some general belief in justice over there.
Yeah, I mean, also, I think he can probably afford the ticket.
What an interesting thing, because he is definitely an evil goblin ghoul man, but it seems that there are odd times where he's remarkably soft.
This is not me.
trying to case the guy fucking sucks but it's interesting how there are like kind of gradations of his evil and how he acts yes look i mean the fact is and i was kind of worried when i was working on this story because that is a general perception of him among a certain class is that the guy is the you know an embodiment of a certain type of billionaire asshole evil harmless you know even steve jobs at times found larry's you know greed and fixation on money to be kind of off-putting hilarious Yeah, yeah.
Larry actually talks about this in a fairly decent commencement address that he gave to USC a couple of years ago, where Steve grabs him by the shoulders and he's like, there's more to life than money, Larry.
And I don't really know how much Larry took that to heart.
I mean, no, I, knowing every, no, the thing is, is it's like, Larry obviously has a...
horrible personality, has treated many people, his staff, the people that work with him, the people that work around him with contempt, he's treated the tech industry with contempt and his customers with contempt.
So yeah, I imagine he's not unilaterally evil in everything he does.
And I think that this is one of those situations where it's complex, but he's still, like, a bad guy.
But of course there are going to be people he's nice to.
Unlike Steve Jobs, who was just well-known as being a piece of shit to everyone.
Right.
But the sense is that he contributed to society because of, you know, the technology and his focus on, you know, consumer electronics and, you know, it felt like it was this artist bestowing his gifts to us.
Whereas Larry, it's like he's just kind of known for being rich and into yachts and having lots of wives.
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It's funny, both of them were kind of trying to do the same thing.
Steve Jobs, mostly famous for stuff other people did.
Larry Ellison, mostly famous for his company doing well because of buying stuff that other people did.
So, with that being said, what is Oracle and what is Larry Ellison like right now?
Like, what is the current state of everything in Ellison world?
Yeah.
I mean, there's so many parts of Ellison world, which is why I use this metaphor of the octopus to explain him and his ambitions, which I know is kind of...
Tell me more about the octopus, just the reader might not have read yet.
Yeah, so that's sort of the structure of my piece.
And I know it's kind of, there are people who might...
think of like, oh, wow, brilliant observation to view, you know, a far reaching power is tantamount to an octopus.
But the fact is, Larry is obsessed with this image and motif himself.
He has multiple holding companies that are octopus themed.
You know, his private equity ish arm is called Cephalopod Corp.
He has also octopus holdings itself.
There's another arm called Tentacle Corp.
And then his venture capital arm, which invests in Theranos, is called Paco.
I really don't like this because of the octopus murders, which is about that journalist Danny Casolaro, who was investigating something around something called the Promise Software.
Famously, I don't even want to go into too much detail for fear of getting fucking killed.
But yeah, I don't love that he's talking about the octopus and Promise Software.
Yeah, there's all sorts of bad stuff about that.
Anyway, how normal?
Keep going.
Yeah, so he believes in kind of the far-reaching-ness of his ambitions.
And so at this current moment, you basically have the core of it, which is Oracle, which is bet the entire company on building AI data centers.
They've transitioned themselves from being a fairly languid database provider into being a NeoCloud and taken on, as I'm sure you've talked about endlessly on your show.
billions and billions of dollars of debt to build data centers effectively for one client in OpenAI, which may or may not have the ability to make good on its multi-hundred billion dollar contract.
And it's a $300 billion contract over five years.
The data center capacity doesn't exist yet.
All that good stuff.
Right.
Right.
Yes.
And building these data centers have been a total pain in the ass.
It's not gone particularly smoothly as most data center builds at this speed go.
So I don't want to single them out more so than CoreWeave and any number of people that are at this break net pace to build capacity for a small number of frontier labs.
But basically, they've taken on a huge amount of debt to do that.
They also own 15% of TikTok, which is a transaction that is transverse.
three administrations or two presidents but trump one biden and trump two um so they are the cloud computing provider and holder of the algorithm uh for tick tock there's all the stuff that's going on with his son david and then there's his relationship um with with trump and how he's kind of tried to find himself politically in this period but as i'm sure you've mentioned multiple times on on your show and and i get to in the story it's all built on debt um this is a company that has taken on unprecedented, nearly unprecedented amounts of debt to fund almost every aspect of Larry's ambitions.
It has taken Oracle, which was a, as we've said, pretty decent company and turned its cashflow negative in order to handle all the capital expenditures.
And look, if it pays off, it is kind of an incredible last stage act for this entrepreneur in his eighties to take this.
middling company at this point and turn it into one of the great winners of the AI boom and kind of rectify the wrongs of missing out on the cloud computing revolution.
But if it doesn't work, I mean, they will be the poster child of the AI bust.
There's no question.
I'm not even sure how financially they make it out of it.
I know, and this is me talking, it's not in the story, but these data centers they're building for OpenAI are all, they're all project financing with most of them being non-recourse, but one or two of them Oracle would be on the hook for.
It's just unclear how they work it out if this doesn't work out.
Like, what the fuck do they do?
Because there's not really another business, is there?
Well, I mean, other than the existing ones.
Yeah, there is the existing businesses.
I haven't really gamed out what it would look like if Oracle, and basically what this means is that OpenAI has imploded, right?
If OpenAI is no longer able to fund the data centers that they have signed well they can't build them yeah well right if for whatever reason you know the spread gets too large and the debt is so onerous that they would never even make money on you know the contracts that oracle would pay out for them i guess they would just have you know massive massive layoffs to a point that the company is a shell of its former self and is basically exists to service its existing debt i i don't know i mean i can't honestly think outside of like the financial collapse um an analog to what oracle would look like if this whole thing falls apart and yeah go on go on well i'm just saying i want to be somewhat measured here in the fact that like a lot of things have to go wrong simultaneously and in order for this to be the reality of things i mean as it stands now they have debt that they are currently paying off um the company does have existing businesses that are underwriting it and They're certainly not the only NeoCloud that's taken on debt in order to fund data center expansion.
And so I don't quite see the domino effects playing out right now to envision.
I mean, not right now.
I do have to push back on that because even though they are not the core weave level, I mean, they don't have 15% bonds currently trading at the level, but here's the thing.
Oracle, can't really service the debt long-term with their current cash flows.
If the revenues don't grow with it, it'll absorb it.
But the thing is, it's not just, oh, can they afford the debt?
It's they're going to have built, if they succeed, $300, $400 billion worth of capacity.
And there's no buyer in the world that can actually afford it, including OpenAI now.
So I mean, the natural answer is, I think the minimum is what you said about them being the poster child for the destruction of all of this capital.
I truly don't, I think that there's a future where Oracle shatters, where they have to sell it, which leads me to my funniest outcome, which is, I think that if this doesn't work out, and I think it's a certainty you can disagree, that's fine, but if that's the case, isn't Larry Ellison quite on the hook for a bunch of margin loans?
Like, if Oracle's stock crashes?
Yeah, I mean, just going down the road of funniest possible outcome, having the eighth richest person in the world getting margin called is very funny, is very darkly funny.
I agree.
I think that that might be the best possible outcome.
And so as we wrap up here, anything about the story I've left out, anything particularly funny or weird that we haven't talked about?
I mean, I spent a lot of time looking into his personal life.
Yeah.
which we talked a bit about his children, but you know, the man is on his sixth wife right now.
Um, how, so, so just to quickly run through his wives, you know, to happen as Oracle is sort of on its way up.
Um, he divorces them.
They have strange relationships with him.
Um, still relatively good.
You have his, his third wife who is the, uh, parent of david and megan his fourth wife melanie craft who is uh was a romance novelist um and they were together for a number of years she wrote a book about a billionaire not clear if it was based on him uh his fifth wife is a ukrainian model and then his current wife joe lynn jew who is born and raised in china she went to school uh here i think high school and the University of Michigan.
There is a very funny story, in my opinion, in the Wall Street Journal recently about the fact that this woman is apparently kind of shadow managing their football program.
Right.
Largely through Larry's money.
But he, and this kind of gets to why I was- Isn't that the one where Larry Ellison also massively boosted a generational bust?
Well, has that guy been a bust?
I actually broke the story with my colleagues when I was at the Wall Street Journal about the fact that they were major donors to an alumni group that was able to recruit away this high school quarterback that had committed to LSU.
And then they were able to lure him over to Michigan.
Has he been a bust there?
I'm not a college football guy.
Yeah, Bryce Underwood has apparently not been very good, but I haven't checked recently.
Yeah.
Well, I mean.
They're sticking with him despite the issues, which is a great way of, which is mostly how Oracle's customers feel.
Yeah, yeah.
Or you could even look at, you know, what's going to be the bigger bus, Bryce Underwood or their data center bet.
Jesus, this kid is, I feel bad talking shit on what is a child, but this was, this wasn't, this is not looking so good.
He's ranked 102nd in passing yards and tied 100th with five touchdowns and 70th QBR.
Not great.
That's rough.
That's really rough.
Well, again, I also don't want to shit on the kid.
Yeah, yeah.
I couldn't do what I would scream.
I would die the moment I got tackled once by a varsity high school player.
So I'm not going to.
Yeah, no, no, I'm with you.
But, you know, he exists at the University of Michigan by the grace of Larry and his wife, Jolynn.
And, you know, Larry is in this constant pursuit for connection in my interpretation of.
his personality and talking to his friends.
I think he's obsessed with the woman that he's with at the time is the way he explained it to a couple of my sources.
You know, he's extremely committed to someone and then he kind of just falls out of love.
And, and that almost immediately ends things with them.
I look at someone like him and we live in the age of billionaires.
I know it's kind of a banal statement, but as the country becomes more and more oligarchic, we kind of just look to our billionaire overlords and try to read the tea leaves of what it is they want because they're basically going to be directing the future of this country.
And Larry, I find to just be a mysterious figure who is obsessed with his legacy.
He's reached this point where almost all of his friends have died.
involved in so many different aspects, media and technology and politics.
I don't know how much he cares individually about all these things.
And at the same time, he's reading, you know, constantly reading biographies about Napoleon and Winston Churchill.
And, you know, as some sources mentioned to me, puts himself up in that league of person and kind of aspires to be this world historical figure.
But it's also kind of a very low.
Yeah, basically through Oracle and I don't know his wives, but you know, I don't know where if someone like that ever finds peace in his life and where contentment comes from and just as like a profile subject, I was fascinated by it.
So I, you know, in one sense you see this world spanning ambition of, you know, being at the center of all of these different transformations at the same time.
It's like, he seems kind of like a lonely guy and I hope people find in him.
as much interest as i did because yeah he really is of the the richest people you know kind of a mystery and someone who people haven't written much about and i feel like you know even though this piece was thousands of words long i could have written so much more because i just don't know if i've gotten to the core of him yet it's fascinating to see him as because like i'm i'm pre-facing this by saying i think he's the scum of the earth i've written Probably 25,000 words about Oracle.
I'll probably have another 10,000, 15,000 in me before the company dies.
It's fascinating hearing, and actually kind of statistically enjoying it, watching these people struggle with living.
Like, they have all this money.
They don't struggle with anything real in life.
They don't have mortgage, but I guess he does.
But they don't have, like, actual existential threats.
So he's sitting around reading fucking books about Napoleon.
Yeah.
And being like, damn, I'm white Napoleon, look at me.
And it's so funny because you'd think that the big company and all the money and the Hawaiian Island and the five, six wives and the 79 children and the media empire would be enough.
But it's very obvious nothing is enough for him, which is, I realize, kind of a banal statement.
But it seems like he didn't, because I know he tried to be a yachter.
He tried to go out on his yacht and that didn't work out.
Well, the yacht thing is actually an interesting story on its own because I think he is pretty successful in yachting.
I mean, the Oracle, yeah, you know, he with his Oracle team and the BMW team or something, I can't remember how the sponsorships worked out.
They do win the America's Cup two times, which if you care about that sort of thing, you know, like that's that's real accomplishment.
But didn't he try and say it?
Wasn't he trying to be a sailor himself?
Yeah.
Yeah.
And he is on the yachts.
But that didn't work out.
Some of the times, well, you know, there's this very kind of harrowing moment in his life in the, in the late nineties, he participates in the Sydney to Hobart open ocean yachting race.
And it was this catastrophe where all the yachts went into a hurricane, a literal hurricane.
Um, and, and several of the sailors died and, you know, Larry's crew on the, the Sayonara, I believe was their yacht.
Uh, by the way, Lachlan Murdoch was a, was a participant on that, um, on that race.
He was on the yacht anyway, they win that race, but Larry is completely freaked the fuck out after all of it.
that he, he, he looks death in the eye and is like, yeah, I'm not doing this anymore.
And so he gets into America's cup racing, which is kind of more of a Harbor racing yachting thing.
And, um, they're pretty successful.
They win a couple of times and then they lose.
And then Larry gets into a protracted legal fight with the America's cup.
Uh, and then he basically tells them to go fuck themselves.
And he starts his only called sale GP, which is dedicated essentially to the destruction of, of America's cup.
Um, That said, from what people in the yachting community tell me, you know, he actually was fairly forward thinking about the future of these hydrofoiling catamarans or whatever they race.
And so I actually think there is a ton of respect he has within certain circles of the yachting community.
But to get back to like, you know.
the emptiness at the core of this person and the search for acceptance, he still, as I understand, attends the America's Cup races.
He's largely rejected by this very waspy community of people who view him as, you know, I don't know, gauche new money or whatever.
Wait, the waspy?
Wait, wait, that's amazing.
So other rich people reject him.
This is my understanding.
Yeah, the New York Yacht Club never really likes the guy.
And so, you know, yeah.
And so the America's Cup still goes on.
You know, they do it every couple of years and Larry as I understand it still attends this thing but as a participant and I talked to a source who was actually on Larry's yacht during one of the one of the last races and he was like I was looking at the guy watching him watch this race that he had spent Untold amounts of his fortune trying to be a winner in and being accepted by and he was just rejected by it and you have this sort of Solitary billionaire figure one of the richest people to ever exist looking at this community that he wanted to be accepted by and you know taken on as its champion just sort of rejecting him and You know, that's kind of where he's at It's so funny because he's just it seems like he's in a decades-long existential crisis Yeah I think that's right.
Certainly when you marry a Ukrainian model in your late 60s and 70s, you have to sort of question what kind of- I mean, that's like 50% of marriages over 50 in England.
So that's fair.
I would love to pretend like I'm kidding.
I've known one other person who's done that.
I wouldn't say I love the person.
But nevertheless- Speaking of England, by the way, Ed, I know we've gone way long.
Oh, yeah, Tony Blair.
Yeah, yeah.
He's very close to Tony Blair.
He single-handedly bankrolls the Tony Blair Institute, which is this NGO.
What the fuck is the Tony Blair Institute?
God fucking damn it.
I leave England.
And anyway.
We could probably do an episode just of the Tony Blair Institute.
I'd like to know more about it myself.
But as I understand it, it's basically this NGO that has these techno-optimist solutions for African governments, largely pushing.
software to solve all their problems, including Oracle software, maybe, probably.
And so he's very close to Tony Blair.
He actually brought Tony out to Lanai once and was showing off the hydroponic greenhouses that he had built there and nearly fed Tony a pesticide-laced tomato that he claimed as organic.
But anyway, in England, there's a whole bunch going on now that I didn't even have a chance to get to in my story, which is that he's building up an entire health institute at Oxford, buying up all kinds of buildings during his, this is part of his search for the cure to cancer.
And he evidently bought a pub that was once the favorite pub for C.S.
Lewis and J.R.R.
Tolkien.
Sorry, just to be clear, Blair or Ellison?
Larry Ellison.
He owns a fucking pub in London.
Jesus fuck.
Yeah, I think it's in Oxford, but yes, it was apparently the pub.
Yeah, the pub for C.S.
Lewis and J.R.R.
Tolkien.
And this really pissed people off, the fact that Larry bought this pub.
I love that.
What I love about that, thank you, by the way, as we wrap up, this has been one of my favorite episodes because Larry Elliston's still an evil gremlin goblin ghoul man, but it sounds like he's just struggling.
to try and find meaning in the world like he's like he's um reminds me of mr frog from smiling friends the listeners email me if you've watched that where it's just like he's done everything and nothing scratches the itch almost makes me think the open ai thing is just like a nah it just i've heard a few a few sources i've talked to about ellison have just been like hey he's old he's trying it yeah just going for it And how interested he is in, you know, the data center stuff.
He's not very hands-on with it.
You know, I've talked to a lot of people who've been out in Abilene, you know, building this shit and, you know, Clay McGorick and those types are all extremely involved.
Larry is sort of this ghostly specter that hangs over the whole project.
And people there are joking about the fact that like, we know we can't afford this shit.
How are we going to pay for it?
It's like, yeah, uncle Larry will cover it.
So, you know, I think.
He really cares about his legacy.
And if you think about the legacy of this company that you founded, and he's like the last of the Silicon Valley Titans that's still actually involved in the running of his company to a degree.
How do you want to go out as like the database provider that kind of just ambled along for a bunch of years until it was, I don't know, bought out by private equity or merged into some other conglomerate or the ones that like fucking went for it and like took on all the fucking debt and became one of the greatest, you know, we were able to avenge the losses of us not being a great cloud computing company.
I mean, when you have that much money and you're that old and you're that much in control, these are the ways you think.
Tom, it's been such a pleasure having you.
You've been listening to Better Offline.
Tom, I'll put the link to your story in the notes.
Tom's an excellent writer.
He's also done some of the best stuff in AI economics.
You've been listening to Better Offline.
Tom, thank you for joining us.
Thanks so much, Ed.
This was great.
Thank you for listening to Better Offline.
The editor and composer of the Better Offline theme song is Matt Ossowski.
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