“We gave guidance in the past that we see gross margin in the 30% to 40% range on that. That continues to hold for us.”

In context

“ter and the cost of raising capital to fund the AI data center, how comfortable are you with the values you are creating from the AI data center business itself? And then as an adjacency, if you do not mind, can you talk a little bit more on the Sovereign Cloud? Can you discuss how you parlay the AI data center business into being the AI provider for sovereign clouds and how that should impact your value of work to Oracle Corporation? Thanks. Clay Magouyrk: Sure. I think we are going to split this one up. I will take the first half, and then I am going to throw it to Mike to talk about some of the Sovereign Cloud stuff. So, look, when you think about the overall profitability of these AI data centers, there are two pieces. One is how profitable it is purely on the accelerators themselves. We gave guidance in the past that we see gross margin in the 30% to 40% range on that. That continues to hold for us. And we continue to get better and better at running these data centers, delivering them more cheaply—the amount of cost in networking and hardware spend as well as power—we see that continuing to incrementally improve. So we are very pleased with that. The other thing to understand is that in these AI data centers, whether it be for inferencing or for training work, the only thing being procured is not AI accelerators. There is a lot of general-purpose compute. There is a lot of, whether it be high performance or large-scale blob storage. There is load balancing. There are identity and security products, etc. That is typically on the order of 10% to 20% of the total spend that ends up going to adjacent services. And when you factor that in, which has higher margins depending on the mix of”