Oracle to Spend $40 Billion on Nvidia Chips for New OpenAI Data Center

Published 10 hours agoORCL

Oracle to Spend $40 Billion on Nvidia Chips for New OpenAI Data Center

Oracle is making waves in the tech sector with its recently announced plan to purchase around $40 billion worth of Nvidia's high-performance GB200 chips. This investment aims to bolster OpenAI's efforts in building a significant data center in Abilene, Texas. The facility is part of the $500 billion Stargate project, orchestrated by OpenAI and SoftBank, and is set to provide 1.2 gigawatts of power. The data center is expected to be fully operational by mid-2026, according to a report by the Financial Times.

The strategic move involves Oracle leasing computing power to OpenAI under a long-term 15-year agreement, establishing Oracle as a key cloud service provider in the project. Meanwhile, the owners of the data center, Crusoe and Blue Owl Capital, have successfully raised $15 billion in financing, which includes $9.6 billion in loans sourced from JPMorgan. The Stargate project is pivotal in maintaining the United States' competitive edge in the global AI landscape as it faces mounting international challenges.

This development represents a strategic shift for OpenAI, aiming to decrease its previous heavy reliance on Microsoft's computing power. Historically, Microsoft had infused nearly $14 billion into OpenAI, mainly through cloud computing credits. Furthermore, the data center raises the stakes in the industry's competitive landscape, setting the Abilene site as a formidable counterpart to Elon Musk’s Colossus project and Amazon’s data hub in Virginia. Reuters reports that the Stargate project's advancement is a testament to the escalating demand for cutting-edge AI infrastructure.

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