Oracle Said to Buy $40 Billion of Nvidia Chips for OpenAI’s US Data Center

Oracle is set to invest approximately $40 billion in Nvidia’s advanced chips to support OpenAI’s new data center in the U.S., the Financial Times stated on Friday.

The data center located in Abilene, Texas, is a component of the U.S. Stargate Project, driven by leading AI companies in the nation, aimed at enhancing America’s strength in the artificial intelligence sector amid rising international competition.

The cloud service provider intends to acquire approximately 400,000 of Nvidia’s top-performing GB200 chips and rent the computing capacity to OpenAI, as stated in the report, referencing multiple sources knowledgeable about the situation. The data center is projected to be fully functional by the middle of next year, and Oracle has committed to leasing the location for 15 years, the report noted.

JPMorgan has facilitated a significant portion of the debt funding through two loans amounting to $9.6 billion, while the site’s proprietors, Crusoe and U.S. investment company Blue Owl Capital, have contributed approximately $5 billion in cash, the FT report stated.

The data center will enable OpenAI to lessen its reliance on its primary supporter Microsoft, as the power needs of the ChatGPT developer have surpassed the supply that Microsoft can offer. For Oracle, the data center and Stargate offer a chance for the company to enhance its cloud computing skills and compete with top players Microsoft, Amazon, and Google.

OpenAI, Oracle, and Nvidia are participating in a Stargate initiative in the Middle East, where a large AI data center is set to be built in the United Arab Emirates, probably utilizing more than a hundred thousand Nvidia chips.