Oracle (ORCL, Financials), the enterprise technology company known for databases, cloud infrastructure and business software, is reportedly leading talks to build a highly secure cloud network for the Japanese government.
The system would be air-gapped, meaning it would not connect to the public internet. Instead, it would link only to classified networks through encrypted hardware.
That setup is designed to reduce the risk of cyberattacks and protect sensitive government and intelligence data. According to the Financial Times, Oracle is currently ahead of Amazon Web Services, Microsoft and Google in the competition for the project.
The cloud is considered important for intelligence sharing between Japan, the United States and other allies. A more secure system could make it easier for those governments to exchange classified information without relying on ordinary commercial networks.
For Oracle, winning the contract would strengthen its position in a part of the cloud market where security matters more than scale alone. The talks are still underway, and no final decision has been announced.
Investors will be watching whether Oracle turns its early lead into a formal agreement and whether similar government projects follow.