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

Release Date: February 27, 2025

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.

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.

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.

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).

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.

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.

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.

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.

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.

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."

Produced by Jess Jupiter with supervising producer Katherine Millsop.