Oracle names insiders Clay Magouyrk, Mike Sicilia as co-CEOs in surprise move

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By Arsheeya Bajwa

(Reuters) -Oracle on Monday named insiders Clay Magouyrk and Mike Sicilia as co-CEOs, replacing Safra Catz, who was instrumental in shaping the company’s cloud strategy and thrusting it to the forefront of the ongoing AI boom with big contract wins.

In her 11 years at the helm, Catz turned Oracle into a cloud powerhouse from a database provider by fiercely competing for a share of the lucrative data center business with Microsoft and Alphabet , while helping drive its market capitalization to nearly a trillion dollars.

She will remain with Oracle as vice chair of the board, the company said.

Shares of Oracle are up about 85% this year amid an AI-powered surge, outperforming those of major rivals Microsoft and Alphabet and helping co-founder Larry Ellison vie for the title of the world’s richest person with Tesla CEO Elon Musk.

Sicilia, 54, in his current role, oversees cloud-based applications and AI products, while Magouyrk, 39, manages Oracle’s underlying cloud infrastructure platform that powers these applications.

The promotion of the two executives underscores the tech industry and Wall Street’s focus on cloud computing strategy, as companies pour billions of dollars into expanding the infrastructure that powers AI.

“Investors are already familiar with both Mr. Magouryk and Mr. Sicilia and that their promotions solidify the importance of the Cloud and Industry businesses as the growth levers for the company,” Evercore ISI analysts said in a note.

“The bottom line is that with Larry remaining at CTO and Safra as Executive Vice Chair, we expect a smooth transition in the near-term.”

Oracle is currently at the center of high-profile discussions to keep TikTok operating in the United States, and all data on the app’s American users will be stored on U.S. cloud computing infrastructure run by Oracle, Reuters has reported.

Additionally, the company reaffirmed its financial forecast provided earlier this month, where it said it was expecting booked revenue at its Oracle Cloud Infrastructure business to exceed half a trillion dollars, pushing the stock to record highs.

Oracle is reported to have signed one of the biggest cloud deals ever with OpenAI, under which the ChatGPT maker is expected to buy $300 billion in computing power from the company for about five years

CATZ’S CAREER

Safra Catz, who took over the top job jointly with the late Mark Hurd in 2014 after Ellison decided to step away from handling the day-to-day affairs of the company, has been a central figure in Oracle’s many acquisitions. Under her watch, the company’s shares have surged more than 586%.

Catz has made a mark for herself as one of the most influential female CEOs in the tech industry and boasts a net worth of $3.3 billion, according to Forbes’ real-time net worth tracker.

She also holds the 15th spot on Forbes’ list of “America’s richest self-made women” and is 40th on its list of the “World’s richest self-made women.”

Trained in finance and law, Catz was a Wall Street banker from 1986 until she joined Oracle in 1999.

Newly appointed co-CEO Magouyrk joined Oracle in 2014 from Amazon Web Services, while Sicilia joined Oracle through the acquisition of Primavera Systems, the company said.

Magouyrk will receive stock options to purchase $250 million in Oracle shares, while Sicilia will receive stock options to purchase $100 million worth of company shares.

Firms across industries have been adopting a leadership structure of “co-CEOs”, where more than one chief executive leads the company as enterprises expand and functions diversify.

Struggling chipmaker Intel had appointed two interim CEOs prior to new CEO Lip-Bu Tan becoming the top boss. Investment group KKR is led by co-CEOs Joseph Bae and Scott Nuttall.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Anil D’Silva)