According to a Financial Times report, Oracle plans to spend around $40 billion on Nvidia chips. This move is one of the biggest chip purchases to date, indicating a growing demand for AI computing power.
The site is located in Abilene, Texas and is described as the first US “Stargate” data center. This is part of a long-term plan supported by Openai and SoftBank, creating large AI facilities. When it ends next year, the Texas Center will deliver 1.2 gigawatts of computing power, offering the world’s largest computing power.
Oracle shows that it plans to purchase around 400,000 new GB200 chips from Nvidia, some of Nvidia’s most advanced processors designed for training and running AI models. According to those familiar with the deal, Oracle plans to lease computing power from these chips to Openai.
The site is owned by Crusoe and Blue Owl Capital and raises $15 billion through a mix of debt and equity to fund the project. Construction began in June 2024 and the campus will include eight buildings. Oracle has signed a 15-year lease for the site, but Stargate itself does not put any money in this particular facility.
JPMorgan offers most debt financing and offers two loans totaling $9.6 billion, including the $7.1 billion loan announced this week. Crusoe and Blue Owl each add about $5 billion in cash to their projects.
Elon Musk is expanding his own project in Memphis, Tennessee, and plans to house around 1 million Nvidia chips. The centre, known as “Colossus,” uses primarily Nvidia’s previous H100 and H200 chips. Musk said this week that the next phase will be the “first Gigawatt AI training super cluster.” Meanwhile, Amazon is working on another data center in Virginia, with over 1GW.
The Abilene Project is part of a larger shift in Openai that appears to reduce its dependence on Microsoft. Up until now, Openai has relied heavily on Microsoft for access to cloud computing. Much of Microsoft’s nearly $14 billion investment in the company came in the form of cloud credits. However, Openai is frustrated that Microsoft is unable to keep up with the growing demand for computing power.
Earlier this year, Openai and Microsoft agreed to terminate their exclusive partnership and are still working to resolve the period when Microsoft will continue to retain license rights for Openai’s model.
In the future, Stargate is expected to provide a large portion of Openai’s computing needs. Launched in early 2025, the group aims to raise up to $500 billion over four years to fund more data center projects in the US.
So far, Openai and SoftBank have each committed $18 billion to Stargate. According to those familiar with the details, Abu Dhabi-based sovereign wealth funds Oracle and Mgx each have pledged an additional $7 billion. The four companies maintain project fairness, led by Openai and Softbank.
Stargate has not yet invested in any particular project, but its plans are expanding beyond the US. Last week, when President Donald Trump visited the Gulf region, the Open announced a new Stargate facility in Abu Dhabi. The site covers 10 square miles and offers 5GW of data center power. This is enough to run over 2 million NVIDIA GB200 chips. Local AI company G42 manages construction.
(Photo from non-flash)
See: Can the US really enforce a global AI chip ban?
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