By Tom Dotan

In a row of six greenhouses on a remote stretch of the Hawaiian island of Lanai, Larry Ellison is trying to use his golden touch in tech to remake the way people around the world eat.

The company behind his effort, Sensei Ag, is eight years in the making and has cost the world's fourth-richest person more than half a billion dollars -- far more than he spent buying the island itself. Early on, Ellison touted cutting-edge technology that would modernize agriculture, make a big impact for society and eventually help grow food in places such as Africa. The billionaire has told executives he sees the project as part of his legacy.

So far, it's mostly been a bust.

Little of the revolutionary tech the company has extolled -- sensors to monitor development, artificial intelligence to breed crop varieties and robots to harvest plants -- is being used, according to people familiar with Sensei. The company has been beset by problems typical to tech startups, including executive changeovers, shifting goals and bad Wi-Fi. It has also stumbled from farming inexperience. The greenhouses, for example, weren't built to withstand Lanai's strong winds and their solar panels have broken down. Some of its top executives are tech veterans who have no commercial agricultural experience.

The 80-year-old Ellison and his Sensei Ag co-founder, celebrity doctor David Agus, envisioned the farm as an ambitious tech venture that would use new techniques for growing tastier, nutrient-rich crops.

Far from feeding the world, its crops of lettuce and cherry tomatoes are only enough to supply the few groceries and restaurants on Lanai and at spots around Hawaii. Thanks to a handful of traditional greenhouses Sensei acquired in Canada, the company also supplies several supermarket chains on the U.S. East Coast and Canada.

One person familiar with the operations described the output as like being promised a Bugatti -- and ending up with a Yugo.

Although the farm has little to do with Ellison's core business, software giant Oracle, the tech mogul has called the project, and the island more broadly, part of a grand experiment in sustainability.

Agus, a medical doctor with no previous agricultural experience, said that when Ellison approached him on the project, the billionaire's lofty goals of returning Lanai to its farming roots -- after decades of destructive pineapple farming -- while also setting the blueprints to feed the world were too good to pass up. "We have an island that we can't grow things on, that we need food for. Let's do it. But at the same time let's change agriculture," he said he thought.

The company has been using the past few years to gain experience with growing crops and perfect its technology, he said in an August interview, adding Sensei was aiming to have a prototype of its new tech by the end of 2025. That timetable has since been extended to midyear 2026.

Sensei Marketing Director Jonathan Lee said last month the company is making major investments in technology to grow food better. He said the company is "currently in stealth mode, and we plan to share details publicly in approximately 18 months." He said Sensei's mission remains to "improve human nutrition and preserve the environment by growing food indoors," and that it is immensely proud of its efforts.

Pineapple damage

A succession of white ranchers and sugar planters traded ownership of the 140-square-mile island -- about six times the size of Manhattan -- in the late 1800s and early 1900s. Before colonists arrived, indigenous farmers grew subsistence crops and fished, though they generally didn't live full time on the island.

In the 1920s, Dole turned Lanai into "Pineapple Island," and for a time it produced 75% of the world's supply of that fruit. The island still has many brightly colored plantation homes dating to that era, but years of damaging agricultural practices, including the use of plastic piping and chemical ripening agents, polluted the soil and made it largely inhospitable to commercial farming. Access to fresh water also has been an obstacle.

In 1985, Lanai was taken over by real-estate developer David Murdock, who phased out pineapple plantations and converted it into a luxury vacation spot. He sold 98% of the island in 2012 to Ellison, whose fortune is around $200 billion, for $300 million.

Murdock was an often-seen, paternalistic figure, who waved to the locals he called his "children." Ellison is more of a mystery to Lanai's 3,200 residents. A few interviewed said they have never seen him, although his presence is apparent in other ways.

He is the largest employer, including at his resorts on the island, and has paid for benefits such as a CT scanner for the local hospital. He is building new rental homes and also luxury residences along the coast for his family, for which he's hired Japanese craftsmen to build with a traditional joinery technique that doesn't involve nails.

The billionaire, whose son and daughter are both in the movie business, rebuilt a century-old theater that boasts it is "the crown jewel of theater experiences in Hawaii." He also is rebuilding the long shuttered bowling alley and planning a dessert bar for the snack menu.

Lanai is even more dependent on food imports than Hawaii as a whole, which overall imports 85% to 90% of its food. Lanai gets a shipment of goods from other islands and the mainland once a week, on what local business owners call "barge day."

Ellison and Agus, who met through Steve Jobs, felt Sensei could fill some of that gap. "The locals aren't going to benefit just from more nutritious food, they're going to benefit from food that tastes better, food that costs less. It was harvested two hours before they take it home from Richard's Market" -- which Ellison owns -- "and make a salad," Ellison said in one early video, before anything was grown.

They decided to grow hydroponically, or in a water-based solution, because of the polluted soil.

But employees said Ellison vacillated on which crops to grow.

One early idea was to repair the land by growing crops with minerals that would fertilize the soil -- for example, by growing cabbages and feeding them to goats to make fertilizer. That idea was abandoned for cost.

Ellison considered growing pricey fruits similar to those in high-end retailers in Japan. Sensei went as far as to import molds used to make square watermelons, a former employee said. It would be what Ellison described as the Tesla approach, referencing how the carmaker began producing expensive cars and later expanded into the midrange market.

Sensei employees explained that American consumers weren't likely to buy $100 melons.

Ellison asked that the greenhouses be retrofitted to grow mangoes, but dropped the idea when shown the facilities would have to be remade from the ground up. The fruit trees need raised beds, with extra warmth and light.

He also told executives to grow food that he could use at the two high-end Nobu restaurants at his resorts on the island. One of his suggestions was wasabi, but ultimately the chefs at Nobu said they would take reliable functional produce like lettuce and tomatoes.

Sensei thought current greenhouse technology was inefficient, and they aimed to update it.

"Greenhouse structures were optimized for tulips in Holland in the 1600s and have not been dramatically overhauled since," Agus said in the August interview.

Other experts in agricultural technology say there have been significant advances in greenhouse technology over the past three centuries. In the Netherlands, for example, agricultural-tech companies have used innovations to turn the small country into one of the leading exporters of produce in the world by making greenhouses grow more with less water and less power, said Shamim Ahamed, a professor at University of California, Davis, focusing on controlled agricultural environments.

Still, Ahamed, who has met with Sensei employees, said the company's current ambition to use robotics to increase yield while reducing human labor shows some promise, especially because the high upfront costs can be carried by Ellison. "If you want to grow in Lanai or Hawaii, the workforce is the biggest issue. It's labor-intensive. If the robotics manage harvesting crops, that could reduce the operational cost at some point," he said.

So far, Sensei hasn't made big advances in producing more nutritious vegetables or in automating facilities, according to people familiar with the matter.

Greenhouse vs. wind

Ellison hired an Israeli firm to build the greenhouses -- a suggestion by his friend, Israeli Prime Minister Benjamin Netanyahu.

Though Israel is considered a leader in greenhouses, the structures were designed for that country's desert climate and weren't built to handle Lanai's high humidity or gusts of up to 80 mile-per-hour winds. The winds blew the roofs off the greenhouses multiple times. Ellison said the structures would cost $12 million, but they ended up costing closer to $50 million, both from the damages and cost overruns, according to people familiar with the matter.

Ellison said the greenhouses, totaling 120,000 square feet, would be off the grid, powered by solar panels thanks to its partnership with Tesla. But the panels often didn't work. The high winds showered them with dirt and debris, and there were questions on whether they were installed properly, according to one of the people.

Instead, the greenhouses' fans, water pumps and other needs were often powered by diesel generators.

Wi-Fi problems meant cameras and high-tech sensors, which were supposed to monitor the crops' health and control such things as window shades, also didn't operate as planned.

Because of an oversight in the initial design, mature plants and immature plants had to be placed next to each other, which allows pests to spread. The greenhouses' fans weren't adequate for the humidity, and supplemental floor fans had to be added.

One executive hired to help build out the operation described the Lanai facilities as no more advanced than a do-it-yourself project.

Still, Ellison frequently took friends and other favored guests at his resorts on tours of the indoor farm, including former British Prime Minister Tony Blair and actor Robert De Niro.

Ellison routinely went through the greenhouses picking tomatoes off the vine, offering them to guests and eating them unwashed, despite having been told they weren't organic and had been sprayed with pesticides. On a tour with Blair, Ellison offered him the unwashed tomatoes. Blair declined, according to a person who witnessed the event.

Beginning around 2020, Sensei acquired facilities in Vancouver and Ontario totaling almost 3 million square feet.

The company bought them from cannabis companies as that market crashed. But the needs of a marijuana growhouse differed substantially from a greenhouse for other crops -- cannabis needs different types of lighting and segregated rooms. The buildings were gutted and retrofitted with standard greenhouse technology.

Sensei later sold off the Vancouver operation. Overall, repairs and retrofits of the Canadian facilities cost around $200 million, helping push the total spending on Sensei to more than half a billion dollars, according to a person involved. The person said the Canadian operations only use about 5% of capacity because the boxed lettuce market is saturated.

"The vision was so big. And then it just slowly got whittled away as we faced up to realities of implementing on Lanai," said En Young, a former general manager of the Lanai facility.

Software focus

Sensei's chief technology officer is Danny Hillis, Agus said. Hillis is renowned in the computer world for developing networking techniques, though he lacks commercial agricultural experience. He leads the company's AI efforts, which Sensei believes can help it predict and cross breed crops to optimize nutrition. Software can also be used to increase efficiency in water and energy use.

After moving through several chief executives, Ellison and Agus in 2023 appointed Dave Douglas, a partner at Applied Invention, a Boston-based tech company that Ellison owns part of. The software engineer lives in Massachusetts and runs the company remotely.

Sensei became one of the largest producers of baby lettuce and cherry tomatoes in Hawaii, with nearly a third of the market. And the Ontario operation, while continuing to use standard, off-the-shelf technology, gave Sensei distribution on the East Coast for its lettuce. It lists hundreds of stores carrying its produce from Virginia to Ontario.

Since the end of 2022, Sensei has slowed its expansion and is focusing more on developing its software and technology, said people familiar with the matter. It is aiming for technology that can make indoor farming more productive, and to eventually be able to sell a package of software and hardware that other farms can license, they said.

Sensei has moved away from its original mission to feed the world. "I personally joined the company because their goal aligned with my goal," said Matthew Stong, Sensei's former head of engineering who said he still advises the company. He is working on his own project now to improve global nutrition.

The company's success might depend on test centers it is running in Southern California.

The heart of that effort now is a prototype the company is building in a rural patch of Southern California, in the town of Somis. The greenhouse uses robotics and software -- some developed by Sensei and some purchased off-the shelf -- that it hopes can make indoor farming more profitable by reducing labor costs. Robots used in agriculture can pick and prune, and also identify pests or diseases.

Sensei also uses a 400-square-foot greenhouse nearby in Burbank, Calif., where Hillis, the chief technology officer, and a team of researchers had been working on cross breeding crops to create new varieties. That facility, which is owned by Applied Invention, is now used for testing its robotics equipment.

People close to the company said Ellison had been pushing for Sensei to lose less money. It has clamped down on expenses such as first-class travel, and jettisoned lower-revenue products. Sensei stopped growing peppers and cucumbers, which were lower selling than its lettuce mixes. Agus said it was a matter of prioritizing crops that would stand out. He denied Ellison was pushing Sensei to become profitable.

"People, no offense, don't really love cucumbers. There wasn't as sustainable a market for it," Agus said.

Write to Tom Dotan at tom.dotan@wsj.com

(END) Dow Jones Newswires

February 23, 2025 21:00 ET (02:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.