Oracle to buy US$40 billion of Nvidia chips for OpenAI’s US data centre: report

Oracle will spend around US$40 billion on Nvidia’s higher-performance chips to power OpenAI’s new US data centre, the Financial Times (FT) reported on Friday (May 23).

The data centre, situated in Abilene, Texas, is part of the US Stargate Project, led by top artificial intelligence (AI) firms in the country, to boost America’s heft in the AI industry amid heating global competition.

The cloud service provider will purchase around 400,000 of Nvidia’s most powerful GB200 chips and lease the computing power to OpenAI, the report said, citing several sources familiar with the matter.

OpenAI and Oracle did not immediately respond to Reuters’ requests for comment, while an Nvidia spokesperson declined to comment.

The data centre is expected to be fully operational by mid-next year, and Oracle has agreed to lease the site for 15 years, the report said.

JPMorgan has provided a bulk of the debt financing across two loans totalling US$9.6 billion, while the site’s owners, Crusoe and US investment firm Blue Owl Capital, have invested around US$5 billion in cash, the FT report added.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

The data centre will help OpenAI reduce its dependence on its largest backer Microsoft as the ChatGPT maker’s demand for power has outstripped the supply Microsoft can provide.

For Oracle, the data centre and Stargate present an opportunity for the firm to boost its cloud computing capabilities and catch up to market leaders Microsoft, Amazon and Google.

OpenAI, Oracle, and Nvidia are also involved in a Stargate project in the Middle East, where a new massive AI data centre will be constructed in the United Arab Emirates, likely using over a hundred thousand Nvidia chips.

The first phase of the UAE data centre will come online in 2026. REUTERS