Oracle Announcement Sends AMD, ARM Shares Soaring

In the past nine months Oracle both acquired Sun Microsystems and recently launched an updated version of that company's 'Niagra' processor. That's an impressive amount of work in such a short time, but Oracle CEO Larry Ellison isn't done shopping. Last Friday, at a company investment meeting, Ellison stated: "Our focus is to build our [intellectual property] portfolio,” Ellison said during the meeting with analysts, according to Reuters. “You could see us buying chip companies. Silicon is very important, software IP is very important."

Speculation on which chip companies sent ARM, AMD, and even NVIDIA stocks upwards. Oracle could easily purchase any of the three, or even all of them together—the company is the third-largest software vendor in the world behind Microsoft and IBM. All three companies have business interests that intersect with Oracle's. Both NVIDIA and AMD have invested in HPC/enterprise computing products, though AMD's years of experience arguably give it an edge in this regard. ARM hasn't made noise in the server market yet, but it's a market the company intends to enter with future processors. Alternatively, Ellison may have something altogether different in mind. It would be a bit odd for Oracle to purchase Sun, launch new processors, then supplant the Niagra series with a lineup of AMD, NVIDIA, or ARM products.

Having just purchased Sun's hardware assets, it would be odd for Oracle to toss them aside

Despite the speculation that drove stock prices upwards, we're betting that Oracle's long-term plans don't include purchasing one of the above corporations. Ellison has repeatedly praised the Apple production model in which the company takes a hand in every aspect of development, but that's not necessarily compatible with a major acquisition. If acquired, all three companies would be directly competing with their own customers. ARM would be the hardest company to sort out—its existing licensing structures likely wouldn't survive and would need to be renegotiated/terminated.

There's a lot of chip companies on the market, we're betting Oracle goes with an option that costs less and doesn't create a nightmare of a tangle for all the company's affected.