Oracle Corporation (ORCL.US) makes a bold move with a 2.8GW fuel cell order to break through the AI power supply bottleneck, causing Bloom Energy (BE.US) to surge over 14% after hours.

On April 13th (Monday), Oracle Corporation (ORCL.US) announced a strategic agreement with Bloom Energy (BE.US) to purchase a total of 2.8 gigawatts (GW) of fuel cell systems to meet the increasing electricity demands of its AI data centers. This move not only addresses pain points such as slow approval processes and long expansion cycles in traditional power grids but also significantly shortens the delivery cycle of computing power through the "plug-and-play" model of generating power on-site at data centers. Currently, the two parties have signed an initial contract for 1.2 GW of installation. Oracle Corporation has even deepened its ties with Bloom Energy at the capital level through warrants, aiming to ensure that the large-scale AI clusters built for core customers such as OpenAI and xAI can receive continuous and stable energy supply. In response to this news, Bloom Energy's stock price rose over 14% in after-hours trading, with the stock closing at $176.67 on Monday. Due to the surge in demand for data centers leading to tight energy supply, the stock price of this energy company has already more than doubled this year. After-hours, Oracle Corporation also rose nearly 2%, with the stock closing at $155.62 on Monday, up 12.69%, becoming one of the top gainers in the S&P 500 on that day. However, looking at its performance for the year, the stock is still down approximately 21%, with a pullback of over 50% from its historical high, with the market remaining cautious about its ability to monetize AI in the long term. In this agreement for up to 2.8 GW, Oracle Corporation has demonstrated extreme distrust in the efficiency of traditional power grid supply. Due to the explosive demand for AI computing power, the traditional utility grid in the United States is facing severe capacity shortages and delays in approval, with large data centers often waiting 5 to 7 years to be connected to the grid. Oracle Corporation's CEO Safra Catz has emphasized in recent earnings calls that power, not chips, has become the number one bottleneck restricting the expansion of Oracle Cloud Infrastructure (OCI). To bypass this obstacle, Oracle Corporation has chosen Bloom Energy's solid oxide fuel cell (SOFC) technology, which can generate power on-site at data centers using natural gas or hydrogen. This "off-grid" distributed energy strategy allows Oracle Corporation to have a data center up and running in just 55 days, which would have otherwise taken several years to build. To secure this scarce resource, Oracle Corporation has signed the initial order of 1.2 GW and has also locked in the purchase rights of approximately 3.5 million shares of Bloom Energy through warrants, transitioning from a mere customer to a potential controller of the energy supply chain. Currently, Oracle Corporation has initiated large-scale construction projects to build AI data centers for clients such as OpenAI and Elon Musk's xAI, with capital expenditures expected to reach $50 billion in the fiscal year ending May. The focus on providing cloud services to AI companies has driven Oracle Corporation's infrastructure business to achieve revenue of $4.9 billion in the quarter ending February. Meanwhile, at the Customer Edge Summit, Oracle Corporation is transforming these valuable computing power and electricity into tangible AI products, such as Utilities Opower. This application utilizes generative AI to analyze vast amounts of electricity consumption data, helping utility companies accurately predict loads and guide users to consume electricity during off-peak hours, directly reducing pressure on the power grid. The closed-loop logic is clear: Oracle Corporation uses Bloom Energy's energy production to generate computing power, which is then used to optimize energy distribution in society. This business loop of "producing computing power efficiently with energy and then optimizing social energy distribution with computing power" is the core drive behind Oracle Corporation's leading performance in the market on Monday. As the guarantee of electricity steadily advances, the demand for computing power leasing in the market is also experiencing explosive growth. As a key partner of NVIDIA Corporation (NVDA.US), CoreWeave (CRWV.US) announced on April 9th (last Thursday) that the scale of the AI cloud computing agreement signed with Meta (META.US) has been expanded to $21 billion, with the collaboration period extended to 2032, and has also locked in years of collaboration with cutting-edge AI labs such as Anthropic. The signing of these long-term contracts signifies that CoreWeave has officially transformed from a simple "computing power supplement supplier" into a core participant in the AI infrastructure field. By significantly increasing the contract period from one year to three years and raising service prices, CoreWeave has successfully secured long-term predictable income. The capital market has responded strongly to this, with multiple authoritative investment banks including Bank of America Corp, Roth Capital, and D.A. Davidson raising their target prices, with the highest reaching $175, acknowledging that CoreWeave has become an indispensable benchmark for cloud services in large-scale inference stages. Analysts point out that as the focus of AI applications shifts from training to inference, the market is placing higher demands on the stability and delivery speed of computing power infrastructure. Practices like Oracle Corporation and CoreWeave's seizing high ground through long-term contracts and innovative electricity solutions are redefining the competition entry barriers for the new generation of AI cloud service providers.