Oracle to Invest $40 Billion in Nvidia Chips for OpenAI’s Texas Data Center
Oracle has committed to spending approximately $40 billion on Nvidia’s high-performance GB200 superchips to support the construction of OpenAI’s cutting-edge data center in Abilene, Texas, as reported by Financial Times. This facility will be the first major project of the Stargate initiative, a $500 billion data center venture aimed at powering artificial intelligence (AI) systems.
The Abilene data center, billed as a flagship Stargate project, is expected to provide 1.2 gigawatts of power upon its completion in 2026, making it one of the largest AI data centers globally.
The data center will span eight buildings, with Oracle purchasing approximately 400,000 Nvidia GB200 chips. These chips are integral to training and running AI systems, and Oracle will lease the computing power to OpenAI for the next 15 years.
The Stargate project is part of a larger $500 billion initiative to develop infrastructure to support next-generation AI models. The center is anticipated to become fully operational by mid-2026, marking a significant step in the rapid expansion of AI infrastructure.
Financing and Investment Details
The project is being financed through a combination of debt and equity, with a $15 billion joint venture between Crusoe, Blue Owl Capital, and other investment partners.
JPMorgan has provided the majority of the financing through two loans totaling $9.6 billion, with $7.1 billion of that amount announced recently. Crusoe and Blue Owl have also invested about $5 billion in cash.
According to Financial Times, the Abilene project is designed to meet the growing demand for AI computational power while reducing dependence on existing tech giants. OpenAI previously relied exclusively on Microsoft for computing power but is now expanding its options through this new data center and the Stargate initiative.
Also read: OpenAI, Oracle, Nvidia, and Cisco Partner to Build UAE's Stargate AI Campus
Reducing Dependency on Microsoft
The Abilene center marks a turning point for OpenAI’s relationship with Microsoft. While Microsoft has been a key partner in providing cloud computing credits and investing nearly $14 billion into OpenAI, the two companies’ exclusivity agreement was recently terminated.
OpenAI expressed frustration over Microsoft’s inability to meet its growing demand for computational power, which led to the new initiative to secure additional computing infrastructure.
Global Expansion of the Stargate Initiative
The Stargate project is a global initiative led by OpenAI, SoftBank, Oracle, and Abu Dhabi’s MGX, aiming to raise $100 billion, scaling up to $500 billion, for advanced data centers. A key site is a 10-square-mile campus in Abu Dhabi, developed with G42, featuring 5 gigawatts of power to support over 2 million Nvidia GB200 chips, addressing growing AI compute demands.
