Oracle Corp. (NYSE:ORCL) reportedly plans to spend approximately $40 billion to purchase 400,000 of Nvidia Corp.’s (NASDAQ:NVDA) GB200 AI “superchips” to power a massive new data center for OpenAI in Abilene, Texas.
What Happened: The site is part of Stargate, a $500 billion AI infrastructure project spearheaded by OpenAI and SoftBank Group Corp. (OTC:SFTBF) (OTC:SFTBY).
Once completed, the facility will deliver 1.2 gigawatts of power, making it one of the largest AI data centers globally, according to a report by the Financial Times, citing several people familiar with the matter.
Oracle will lease the site for 15 years and provide compute capacity to OpenAI, which no longer relies exclusively on Microsoft Corp. (NASDAQ:MSFT) for infrastructure support.
The Texas facility is being developed by Crusoe and Blue Owl Capital, with more than $15 billion in debt and equity raised, including a total of $9.6 billion loan from JPMorgan Chase & Co. (NYSE:JPM).
Construction began in June 2024, and the center is expected to be fully operational by mid-2026.
Once finished, its scale will be comparable to Elon Musk’s proposed expansion of his “Colossus” data center in Memphis, Tennessee, which aims to accommodate around 1 million Nvidia chips.
Why It’s Important: Previously, OpenAI relied heavily on Microsoft’s Azure cloud platform. However, earlier this year, the two companies agreed to end their exclusivity deal after OpenAI’s compute needs began to outpace Microsoft’s capacity, the report added.
Earlier this week, it was also reported that OpenAI is acquiring Jony Ive’s AI device startup, io Products, in a $6.5 billion all-stock deal.
Ive, known for designing the iPhone and other iconic Apple Inc. (NASDAQ:AAPL) products, will join forces with OpenAI to develop AI hardware.
Price Action: Oracle shares dipped 0.013% in after-hours trading, reaching $155.95 at the time of writing, after falling 0.85% during regular trading hours on Friday, according to Benzinga Pro.
Benzinga Edge Stock Rankings gives Oracle a growth score of 31.75%, highlighting the company’s solid market momentum. Click here to see how it compares to other stocks.
Read Next:
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Sundry Photography / Shutterstock.com
