Larry Ellison’s Bid to Remake Farming Has Been a Bust

Summary

WSJ Tech News Briefing: Larry Ellison’s Bid to Remake Farming Has Been a Bust

Release Date: February 27, 2025

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Introduction

On February 27, 2025, The Wall Street Journal's Tech News Briefing delved into the ambitious agricultural venture spearheaded by Oracle co-founder Larry Ellison. Titled "Larry Ellison’s Bid to Remake Farming Has Been a Bust," the episode explores the challenges and setbacks faced by Ellison’s company, Sensei Ag, in transforming farming through advanced technologies.

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Larry Ellison: A Silicon Valley Titan

Charlotte Gartenberg introduces the episode by highlighting Larry Ellison’s prominent role in the tech industry. "[Ellison] is kind of a Silicon Valley legend... he is 80 years old now and still extremely involved in the day-to-day..." (01:24) explains Tom Dotan, the WSJ reporter covering the story. Ellison remains a pivotal figure at Oracle, actively participating in earnings calls and maintaining his influence within the company.

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The Genesis of Sensei Ag

Charlotte Gartenberg inquires about the origins of Sensei Ag. Tom Dotan responds by outlining Ellison's acquisition of the Hawaiian island of Lanai in 2012. "Since he bought it, he has been building it up, refurbishing a lot of the high-end resorts... using it as a laboratory of sustainability" (02:11). The island serves as a testing ground for sustainable living practices, aiming to reduce reliance on external resources.

Ellison co-founded Sensei Ag with Dr. David Agus, a renowned cancer specialist. Together, they envisioned Sensei Ag as part of a larger wellness retreat network, incorporating sustainable farming practices to enhance human nutrition and environmental preservation.

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Sensei Ag’s Ambitious Vision

The initial concept for Sensei Ag was to revolutionize agriculture using AI, robotics, and advanced software. The plan included:

• Next-Generation Greenhouses: Equipped with sensors, cameras, and computer vision to monitor crop health and growth.
• Sustainability Focus: Reducing environmental impact by optimizing resource usage.
• Scaling Operations: Establishing facilities both on Lanai and in Ontario to test and expand the farming model.

Tom Dotan elaborates, "It's going to be a next generation farm that was going to use the latest technology and innovate on new technologies that could help crops grow more quickly and healthily and more nutritious" (04:17).

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Current Status: A Struggle to Innovate

Despite the high-tech aspirations, the reality has fallen short of expectations. Charlotte Gartenberg notes that the greenhouses on Lanai have not realized their technological potential. Tom Dotan reports, "In reality, none of that is being used. The greenhouse that's on Lanai is incredibly basic... essentially a do-it-yourself project" (04:17).

Key Points:

• Basic Infrastructure: The greenhouses lack the advanced systems promised, relying on simple methods to grow lettuce and tomatoes.
• Limited Output: While supplying local grocery stores, the production has not met the ambitious targets set for extending nutritional benefits.

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Challenges and Underperformance

The project has faced numerous hurdles that have hindered its progress towards becoming a high-tech agricultural model:

1. Design Flaws: The initial designs by contractors unfamiliar with Lanai’s climate led to inadequate systems, such as missing evaporative cooling.

   "The contractor who had designed them was not at all familiar with the climate in Lanai and that had to be ripped out and redone" (06:46).

2. Industry Criticism: Professionals in the greenhouse sector were disappointed by the unsophisticated setup, with one describing it as "being promised a Bugatti and showing up there and seeing a Yugo instead" (06:46).

3. Market Saturation: The lettuce market, especially on the East Coast, is highly competitive, limiting Sensei Ag’s sales potential.

4. Operational Limitations: The Canadian facility utilizes only a fraction of its capacity, further restricting growth.

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Shifting Strategies Amid Setbacks

In response to underperformance, Sensei Ag considered pivoting to higher-end crops to enhance profitability. Tom Dotan shares, "They were thinking about growing like high end crops... hundred dollar watermelons or something" (10:59). However, practical demands from local chefs, particularly at Nobu restaurants on Lanai, steered the focus back to more conventional produce like lettuce and tomatoes.

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Financial Commitment and Future Outlook

Larry Ellison has invested over $500 million into the Sensei Ag project, demonstrating unwavering commitment despite the setbacks. Tom Dotan notes, "According to Dr. Agus, there is no directive from Ellison to turn a profit on this thing yet. This is an R and D process" (11:45). The emphasis remains on research and development rather than immediate profitability, acknowledging the capital-intensive nature of agricultural innovation.

Furthermore, Sensei Ag’s marketing director stated that the company is continuing to make significant investments in technology, with plans to publicly share advancements in approximately 18 months. The mission, according to the marketing director, still focuses on "improving human nutrition and preserving the environment by growing food indoors" (07:54), reflecting an ongoing commitment to their foundational goals despite current challenges.

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Conclusion

Larry Ellison’s ambitious endeavor to transform farming through Sensei Ag has encountered substantial obstacles, primarily due to implementation issues and market dynamics. While the project has not yet achieved its high-tech farming aspirations, significant financial investment and a continued focus on R&D suggest that efforts to innovate in sustainable agriculture are far from abandoned. As Sensei Ag navigates these challenges, the industry's response and future developments will be critical in determining the venture's ultimate success.

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Key Quotes

• Tom Dotan [01:24]: "Larry Ellison is the chief Technology officer and executive chairman of Oracle, which is this giant database company based in Silicon Valley..."

• Tom Dotan [04:17]: "It's going to be a next generation farm that was going to use the latest technology and innovate on new technologies that could help crops grow more quickly and healthily and more nutritious."

• Tom Dotan [06:46]: "The contractor who had designed them was not at all familiar with the climate in Lanai and that had to be ripped out and redone."

• Tom Dotan [06:46]: "It was like being promised a Bugatti and showing up there and seeing a Yugo instead."

• Tom Dotan [11:45]: "There is no directive from Ellison to turn a profit on this thing yet. This is an R and D process."

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Produced by Jess Jupiter with supervising producer Katherine Millsop.

Transcript

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[Charlotte Gartenberg]

Welcome to Tech News briefing. It's Thursday, February 27th. I'm Charlotte Gartenberg for the Wall Street Journal. Larry Ellison, the co founder and executive chairman of software giant Oracle, wants to change farming using AI, robotics and software. The company behind his efforts, Sensei Ag, is eight years in the making and has cost him more than half a billion dollars. But so far the greenhouses on a remote stretch of the Hawaiian island of Lanai have not yet boosted output or nutrition with their crops. Our reporter Tom Dotan has been following this story and he tells us how Ellison has sought to transform agriculture with tech and why the effort so far has been a bust. Tom We've talked about Oracle on this show before, but for a refresher, who's Larry Ellison?

[Tom Dotan]

Larry Ellison is the chief Technology officer and executive chairman of Oracle, which is this giant database company based in Silicon Valley. It's kind of a Silicon Valley legend, dates back to the era of Microsoft and Apple and that whole cohort of Silicon Valley. And Larry Ellison is kind of one of the members of that club, famous to many people around here as Steve Jobs and Bill Gates is. And he, unlike the rest of them, has remained involved in Oracle and he is 80 years old now and still extremely involved in the day to day appears on all the earnings calls and still as active as almost anyone is, but certainly compared to someone from his generation of Silicon Valley.

[Charlotte Gartenberg]

How did Sensei Ag get started? Like what was the idea?

[Tom Dotan]

So in addition to being the co founder, chief technology officer, executive chairman and largest shareholder of Oracle, he is also currently fourth richest person in the world and he in 2012 bought the island of Lanai, which is one of the islands in Hawaii. Since he bought it, he has been building it up, refurbishing a lot of the high end resorts that are based there and also using it as a laboratory of sustainability and trying to see if he can use the land and other elements and resources on this 141 square mile island as a place to try out a new sustainable future and ways for people to live without pulling too much off the land.

[Charlotte Gartenberg]

And who did he start it with?

[Tom Dotan]

So he co founded the company sensei with Dr. David Agus, who is a celebrity doctor. He frequently appears on talk shows on like the Today show. But he's absolutely a respected and legitimate cancer doctor. So Sensei as like an umbrella organization is this high end wellness retreat. There are locations on Lanai, there's one in California. But then as part of that on Lanai, he wanted to build up a farm and grow fruit and vegetable that could be used as part of his grand vision and experiment in sustainability.

[Charlotte Gartenberg]

What's the project looking like right now?

[Tom Dotan]

Right now, Sensei Ag, which split off from the wellness company, is basically two and a half operations. One is this series of greenhouses that they built on Lanai and that supplies vegetables and lettuce and tomatoes to the Hawaiian Islands. There's also a second facility that they have out in Ontario which was part of a strategy to expand and start testing and see if they could scale up this whole operation. And then they also have these test facilities that are going on where they're trying to innovate on the technology that's been used in these greenhouses to do the things that they want to do to help fulfill the mission of this company.

[Charlotte Gartenberg]

So on Lanai, what kind of tech is being used in these greenhouses?

[Tom Dotan]

So the idea and the pitch of this thing is that it was going to be a next generation farm that was going to use the latest technology and innovate on new technologies that could help crops grow more quickly and healthily and more nutritious. And the plan was to use sensors and cameras and computer vision and be able to monitor the health and growth of the crops. All of that was part of the pitch in the way that they were talking to the media about this a couple of years ago. In reality, none of that is being used. The greenhouse that's on Lanai is incredibly basic, like non high tech greenhouse standards, considered fairly bare bones and primitive. They're growing lots of lettuce and tomatoes, enough to supply the grocery stores on Lanai and around Hawaii. But this is, as someone described to me in the course of reporting out this story, essentially a do it yourself project. It's not high tech at all.

[Charlotte Gartenberg]

Larry Ellison is the fourth richest person in the world. How much time and money has he spent on this project so far?

[Tom Dotan]

He spent quite a bit of time on this. He was really involved in checking in and regularly seeing the progress of this farm in a way that he actually isn't in a lot of his other ventures. So this is extremely important to him in terms of his time, which is very valuable, but also money. As of publication of this story, he spent well over $500 million.

[Charlotte Gartenberg]

Coming up, what has that $500 million bought? And just how far is Sensei Ag from the transformative farming vision that inspired it? That's after the break. I can say to my new Samsung Galaxy S25 Ultra, hey, find a keto friendly restaurant nearby and text it to Beth and Steve. And it does without me lifting a finger so I can get in more squats anywhere I can. 1, 2, 3.

[Tom Dotan]

Will that be cash or credit?

[Charlotte Gartenberg]

Credit.

[Tom Dotan]

4 Galaxy S25 Ultra the AI companion that does the heavy lifting. So you can do you get [e-mail] compatible with select apps. Requires Google Gemini account. Results may vary based on input. Check responses for accuracy.

[Charlotte Gartenberg]

All right, Tom, before the break, you mentioned that someone you spoke with had called this $500 million venture a DIY project. What are some of the challenges that have prevented it from being as high tech as it set out to be?

[Tom Dotan]

Within the indoor farming and greenhouse circles, there's a certain expectation of what a well run farm would look like. It would have systems that are well built and situated to growing the crops, making sure that you don't have intermixing of mature plants and young plants so that pests would spread. There were lots of issues that came up when they were building these farms because of the contractor who had designed them, who was not at all familiar with with the climate in Lanai and that had to be ripped out and redone. There are floor fans or at least were sitting inside the greenhouses to provide more evaporative cooling to the crops because when it was initially designed it didn't have that in mind. All of these things and more are going on there that when professionals, people who had spent their careers working on greenhouses came and visited this thing, they were really shocked at how unsophisticated everything was in this place. One of the people that I talked to in the story said given all the high talk about the tech that was being used here in the next era and generation of farming and what it really was, it was like being promised a Bugatti and showing up there and seeing a Yugo instead.

[Charlotte Gartenberg]

We should note that Sensei's marketing director said last month that the company is making major investments in technology to grow food better and that it plans to share details publicly in approximately 18 months. He also said Sensei's mission remains to, quote, improve human nutrition and preserve the environment by growing food indoors. And it's immensely proud of its efforts. But, Tom, let's take a step back for a second. Why did Ellison choose Lanai for this project?

[Tom Dotan]

Larry owns Lanai and his relationship with the island, which was also very interesting to me while doing the story, is evolving, and it grew into this grander vision and project that he's had about sustainability. So that's one part of it. The other part of it is that Lanai actually has a history of farming that is super interesting. For a time, it was the world's largest supplier of pineapples, and it was owned for quite a long time of the 20th century by the Dole Fruit Company. I mean, there were these huge pineapple plantations, and everyone that lived on the island more or less worked for them. And that whole industry, it went into decline, and it ended up actually having a huge deleterious effect on the soil because of poor ag practices. And so there were early visions by Ellison and Agus to maybe even start a farming venture that could repair the soil and return it to its agricultural utopian glory days. And that didn't work out for cost reasons and everything else. But all of that kind of figured into what Larry was thinking about when he wanted to do this thing and build an indoor farm. The other part of it, Hawaii in general, is very reliant on the outside world for its food and lots of other things. 85 to 90% of the food that gets eaten in Hawaii comes largely from the mainland. And so it's extremely dependent on outsiders. And Lanai is like even a more extreme version of that.

[Charlotte Gartenberg]

So this project is, in part meant to be an agricultural example. You wrote that so far, it's mostly been a bust based on people you've spoken to, what's gone well and what's gone not so well.

[Tom Dotan]

They, on Lanai are making lettuce and tomatoes. Like, I went to Lanai last August, and I went to the two grocery stores, one of which is owned by Larry Ellison, and they have their lettuce on the shelves. And I talk to the people there, and they like it. And, you know, in terms of output, they grew to take 30% share of the locally grown lettuce and tomato market. They have not innovated at all on the way lettuce is grown. Their Canadian facility is only using 5% of the total space that they have in the greenhouse for producing vegetables. Lettuce entirely. The lettuce market is completely saturated because there are a lot of greenhouses on the east coast. And so they're not really selling a ton. A lot of the things that they had expected to work just flat out didn't. And to people within the greenhouse industry, they are not considered to be very successful innovators.

[Charlotte Gartenberg]

So have there been any shifts and strategies around the greenhouses to correct for this?

[Tom Dotan]

At one point they were thinking about growing like high end crops, things that would cost a lot of money and being profitable because of that. So rather than like affordable lettuce and tomatoes, they're like, why don't we grow expensive fruit that people would maybe want to buy? Hundred dollar watermelons or something? They could supply extremely high quality sweet watermelons. And then also Ellison was very interested in growing mangoes, which was not practical given the design of the greenhouses. There was talk about growing wasabi for the Nobu restaurants, which are in the two resorts on Lanai. Ultimately, the chefs at Nobu were like, let's just take stuff that we could use for our dishes. And that was how they ended up with lettuce and tomatoes.

[Charlotte Gartenberg]

What's the company's timeline around profitability?

[Tom Dotan]

They're still figuring that one out. According to Dr. Agus, there is no directive from Ellison to turn a profit on this thing yet. This is an R and D process. They're working on perfecting the technology that could end up changing the face of agriculture. And R and D is a very capital intensive process and so it's hard to put a price tag on that. And so even though they are selling their lettuce and tomatoes on Hawaii and their lettuce on the east coast of the US and in Canada, they're not really talking too much these days about turning a profit on these things.

[Charlotte Gartenberg]

That was WSJ reporter Tom Doton. And that's it for Tech News Briefing. Today's show was produced by Jess Jupiter with supervising producer Katherine Millsop. I'm Charlotte Gartenberg for the Wall Street Journal. We'll be back this afternoon with TNB Tech Minute.

[Tom Dotan]

Thanks for listening.