AI Revolution: Nvidia and Oracle Set to Soar with Texas's Star Gate Data Center

UBS recently released a report highlighting potential benefits for Nvidia and Oracle stemming from their involvement with Texas's AI data center, known as the "Star Gate." According to UBS, this project could lead to Nvidia securing up to $20 billion in GPU revenue, while Oracle's cloud infrastructure may achieve over $2 billion in gains.

Located in Abilene, Texas, once fully operational, the data center is expected to deploy approximately 400,000 Nvidia GB200 GPUs. This deployment corresponds to an estimated sales figure of around $20 billion at current prices. With OpenAI expanding computational capabilities via Oracle, Microsoft, and CoreWeave, an additional $50 billion in network equipment income could be generated.

Oracle's OCI is set to host 100,000 GPU clusters during its initial phase, potentially driving at least $2 billion in revenue. As OpenAI shifts more workloads from Microsoft, it may trigger significant order backlogs, boosting both Nvidia and Oracle's financial outlook.

For OpenAI, the center is crucial, particularly after recent GPU shortages forced limitations amidst rising ChatGPT demand. The additional supply from Abilene could help accelerate its technology roadmap and regain growth momentum. UBS analysts Karl Keirstead, Timothy Arcuri, and Radi Sultan emphasize that with OpenAI seeking more infrastructure control, the "Star Gate" has the potential to reshape the competitive landscape among AI infrastructure providers.

Investors should remain attentive to these developments, as Nvidia's GPUs and Oracle's cloud services play central roles in America's $500 billion AI strategy. Securing long-term, large-scale orders from the "Star Gate" could significantly alter the growth trajectories of both companies.