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We’re just a month into 2025, and the surge of news related to Agentforce, AI, and technology has been staggering. Over the past week, we've experienced the excitement of the $500 billion Stargate announcement and the disappointment of Nvidia experiencing the most significant one-day loss for a stock company in history due to Deepseek, followed by a partial recovery amid some unavoidable dubious rumors.
However, there’s more to come—the latest update involves a possible merger between two long-established powerhouse software firms, Salesforce and Oracle.
Salesforce and Oracle
Before prolonging the pretense any further, there appear to be no “official” reports or speculation suggesting that a merger or acquisition is imminent for either organization. The Information released a largely conjectural article last week titled “Why Oracle and Salesforce Should Merge.”
Following Oracle’s participation in the $500B Stargate initiative, Anita Ramaswamy, a financial analyst for The Information, crafted a rationale for a potential merger between the two cloud leaders. One reason is that Oracle is significantly smaller and facing financial constraints compared to some project partners and competitors like Microsoft and Google.
Oracle's recent investments in AI chips and servers are putting pressure on its cash flow, with only $10.9B available in cash as opposed to $90B in liabilities, as reported by The Information. Hence, a merger or acquisition of Salesforce—likely to yield $10B in cash this year alone—could bolster Oracle's cash reserves as it aggressively pursues AI investments.
Nonetheless, the piece many are circulating is TechGig’s “How Oracle-Salesforce deal could redefine tech leadership,” which has gained nearly 20,000 views on social networks.
The opening of TechGig’s article mentions, “Oracle and Salesforce have been in discussions regarding a potential merger,” referencing The Information as their sole source throughout the article.
Is a Merger Possible?
It isn’t the first time the idea of Oracle acquiring or merging with Salesforce has been discussed. Bloomberg reported in 2015 that Salesforce was receiving takeover offers, and Oracle's name was mentioned around the time Oracle aimed to lead in the cloud sector.
Speed ahead to 2021, and SaaStr founder Jason Lemkin expressed in a website Q&A that a merger or acquisition would be too late for either firm, with Salesforce’s market cap at $123B and Oracle’s at $189B. Salesforce’s market cap currently stands at $328B, while Oracle’s is $ 476 B.
A merger or acquisition now would mark one of the largest in history, surpassing Vodafone’s merger with Mannesmann, which was valued at $183B in 1999 ($334.7B when adjusted for inflation).
Larry Ellison, CEO of Oracle, and Marc Benioff have a long-standing relationship. Benioff was the youngest-ever VP at Oracle, with Ellison as his mentor during his early career. After Benioff transformed the software industry with the launch of Cloud CRM in 1999, Ellison was among his initial investors.
However, their camaraderie soon shifted to fierce rivalry as Salesforce began to outpace the established players in the next wave of software delivery via the cloud.
Summary
A merger may seem unlikely, but it is an interesting idea. With upcoming improvements in AI efficiency and the cost savings that a merger could bring, both companies could significantly increase their profits.
Salesforce and Oracle are strong rivals; however, they have numerous domains in which they do not compete, such as Oracle’s Data Centers and ERP solutions. Salesforce boasts an impressive brand that Oracle—currently perceived as a relic in the industry—could leverage.
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