Oracle plans $40B Nvidia chip deal for AI facility in Texas

Oracle plans to spend about $ 40 billion on NVIDIA chips to support a huge new data center developed by Openai in Texas, according to a report before Financial times. This step is one of the largest chips to date and indicates the increasing demand for artificial intelligence computing power.

The site is located in Abilene, Texas, and is described as the first American “Stargate” data center. It is part of a long -term plan backed by Openai and Softbank to create large -scale AI facilities. Upon completion of next year, the Texas Center is expected to provide 1.2 GB of computing energy, and places it among the largest in the world.

Oracle indicated that it intends to buy about 400,000 from the new GB200 chips in NVIDIA, which are some of the most advanced processors in NVIDIA designed to train and operate artificial intelligence models. Oracle plans to rent computing power from these chips to Openai, according to people familiar with the deal.

The site is owned by Crusoe and Blue Owl Capital, which raised $ 15 billion through a mixture of debt and fairness to finance the project. The construction started in June 2024, and the campus will include eight buildings. Oracle has signed a 15 -year rental contract for the site, although Stargate itself did not put any money in this specified facility.

JPMorgan provides most debt financing, providing two loans with a total of $ 9.6 billion, including a $ 7.1 billion loan announced this week. Crusoe and Blue OWL added about $ 5 billion in cash for the project.

Elon Musk expands his own project in Memphis, Tennesse, with plans to accommodate about one million NVIDIA chips. This center, called “Colossus”, is mostly used as the previous H100 and H200 chips in NVIDIA. Musk said this week that the next stage will become “AI Training Supercluster.” Meanwhile, Amazon is working on a separate data center in Virginia will also exceed 1GW.

The Abilene project is part of a larger transformation of Openai, as it is looking to reduce its dependence on Microsoft. To date, Openai has relied heavily on Microsoft to reach cloud computing. Many Microsoft’s investment came about $ 14 billion in the company in the form of cloud credits. But Openai has become frustrated because Microsoft cannot keep up with the increasing demand for computing strength.

Earlier this year, Openai and Microsoft agreed to end their exclusive partnership, and are still working to resolve the period when Microsoft will continue to maintain licensing rights in Openai.

Looking at the future, Stargate is expected to provide a large share of computing needs in Openai. The group, which was launched in early 2025, aims to raise up to $ 500 billion over a period of four years to finance more data center projects in the United States.

So far, Openai and Softbank have pledged $ 18 billion for Stargate. Oracle and MGX, a sovereign wealth fund based in Abu Dhabi, committed another $ 7 billion each, according to people familiar with the details. The four companies will maintain property rights in the project, as Openai and Softbank took the initiative.

Stargit has not yet invested any specific project, but its plans are expanding beyond the United States. Only last week, during president Donald Trump’s visit to the Gulf region, Openai announced the new Stargate facility in Abu Dhabi. The site will cover 10 square miles and serve 5GW of the data center capacity – enough to run more than 2 million NVIDIA GB200 chips. The local AI company G42 Manages Building.

(Image from Unsplash)

See also: Can the United States really impose a ban on global artificial intelligence?

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