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 arch-demon and Oracle founder Larry Ellison. And today I'm joined by Tom Datan, a wonderful writer who just had a piece published about this vile old fart in Vanity Fair. Tom, how you doing?
Uh, I'm doing great, Ed. I really like that X-Men style Magneto intro to Larry.
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 I've... 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, but 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 you know, 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 like 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... 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. 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. And Bill... sorry, and Larry is a self-taught programmer. 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, providing a database basically. Larry is very into the plumbing and database side of things in...
Which was quite boring at the time, right? It wasn't really...
Extremely boring, right? Yeah. I mean, you have PE... Sorry, what are we saying?
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, you know, specific data into these mainframes. And Larry, you know, 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 the CIA software contract is Oracle.
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, but years down the road it does take that name. And their first client, the company that later becomes Oracle, their first client is the CIA.
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, you know, 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. You know, 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, you know, office productivity tools to people. And then you have, you know, Larry Ellison who wants to own all aspects of the customer relationship. And it was just straight up, you know, 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...
Well, I mean, yeah, the answer is yes. 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 [__] 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 Marc Benioff is an early Larry Ellison acolyte.
Oh really? I actually didn't know that.
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, you know, 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, but...
Well, I think that... 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... 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. Like, 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? You know, 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, you know, 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, you know, capital until recently, you know, capital expenditures, charge people on an annual basis for your product and it's pretty cheap to do it. And 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 [__], they could not keep them together. And well, 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, is the easiest.
I did not know that. The '90s were crazy, man.
Yeah, that... wait, 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.
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, 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 pretty clever banker, Safra Catz, who I'm sure we're going to talk about.
Yeah. She comes in, she was a banker, she comes on to be their CFO, and basically leads them through these years of acquisitions. And so they end up buying Sun Microsystems, which was like 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... like it was like a couple months later, filed a suit against Google claiming that its patents were infringed in like a...
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 Catz story, which I know I messaged you, but I need the listeners to hear. So...
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., illegal 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 [__], get [__] 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 that this was tantamount to Apple firing Steve Jobs in the old days, and he'd go on to hire Hurd as president. So a few years later in 2014, six hours before an announcement saying that he and Safra Catz would be co-CEOs of Oracle, Catz turns to Hurd and says, according 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, Hurd dies of cancer, making Catz the sole CEO of Oracle.
And just to be clear, [__] Mark Hurd. Like, [__] I... you don't have to agree with me, Tom, but I think he was a piece of [__]. It's good he's gone from the world. [__] him. Nasty little pervert. Anyway, that's who Larry Ellison was backing. But back to Safra Catz.
Yeah. No, no, listen. And like you said, Mark 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 Catz, you know, she comes in, she was a banker at... I'm [__], I can't remember the name of the banker that she...
I'm... look it up real time.
Yeah, 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. The Department of Justice gets involved. Takes 18 months. They end up buying the company. They win. They fire a huge percentage of them. They go on to buy a couple of years later Cerner, which is a health tech... a 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, you know, 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 [__] 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 [__] is he talking about?
Well, yeah, he just was flat out wrong. I mean, there's just no way around it. There's no debating, you know, what happened during this period because you have relative pipsqueaks companies like, you know, at least on this front, Amazon and Google and, you know, Microsoft is floundering during the Ballmer 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. And so they cede 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 Hurd is the CEO and Safra, you know, is alongside there. 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-some...
20... I don't have the exact number in front of me, but it's in the mid...
And goes up to 40. I mean...
It is. For a company that's worth $400 billion, I mean, you have, you know, huge ownership stakes in private companies, but for a $400 billion company that's publicly traded to have a single person owning 40% of its shares is almost unprecedented. 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 the kind of revenue of Oracle adjusted for inflation, it's flat. And I looked this up myself and 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, you could argue it's decently well spent. I mean, they were buying these shares at... 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, $140 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. It also 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 account, he has what, at least $21 billion if not more dollars in personal loans.
Yeah. I don't know the exact number, but the thing about...
Shares 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 happened there because it was very, very weird. But...
I mean, what... from... just to explain for the listeners. So a couple weeks back there was an announcement that Larry was going to dump eight or nine billion worth of shares and then within one day it was actually... it was seven billion and then within one day because everyone went, 'Excuse me, what the [__] was that, Larry? What you doing with those shares?' 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, our boy 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 in Hawaii.
He owns an island, which I definitely would love to talk about, but... 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 term is... the phrase is something like a freight train of debt headed toward us right now because of all of his spending.
And what is he spending that money on?
Personal was the category for a lot of this stuff. So...
Yes, but what kind of personal? What was...
Look, I think boats, boats, 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...
He has two from his third marriage to Barbara Boothe, 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, Jolin Zhu, he has five very young children who he had in his late 70s to early 80s.
Damn, my man's [__], 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... 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. She's the more kind of Shakespearean figure of the two. So both of these guys want to go into Hollywood. As they grow up, Larry is not involved in their life 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.
Okay. Okay. So they make a bunch of movies in the 2010s like Zero Dark Thirty, The Master. She's very close with Kathryn 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. No, 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, her...
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, like...
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. But I... this is... so he was out of their life, but he just came back into it? Or was he fully estranged? Or was he just off doing whatever it is he does all day?
Yeah, I think more 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...
Yeah. I mean, look, who's to say what lives inside the mind of a man? But 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 into a successful, you know, 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 like it's driven by what he says is like a 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. 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 strange. 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, you know, billionaire...
Scions? Like, not really. Like, I think that there are plenty of rich people who don't give a [__] about their kids and would leave them on the screen. I mean, Steve Jobs... Steve Jobs, classic...
Classic kind of a child leaver. Like the Behind the Bastards episode where we did, god, back when I started Better Offline, it's 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 and the...
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, report it out in my story, the man does not give a [__] 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-founded 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, you know, everything that's going on now with Skydance and CBS News and now CNN, people are trying to like attach to this Larry Ellison worldview and he's, you know, in the midst of a political project. I didn't find that in my reporting. I think...
It's a much more interesting story. Yep. Go ahead. How did you come to the conclusion that 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. The guy is increasingly conservative. He's very influenced by Elon Musk. He obviously is a huge supporter of the state of Israel 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 Bari 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 buy 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 it?
I think it's a tertiary, if not below, cause in what's going on here. I think with David, he believes he has a vision of turning, you know, this consolidated media company into 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 Hollywood... he's like 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 Bari Weiss.
And to be clear though, they are obvious... they are definitely right-wing people. Like, I 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.
