NVIDIA, Oracle to Gain $250 Billion from Texas AI Data Center

NVIDIA and Oracle are poised to be the primary beneficiaries of the "Stargate" AI data center project in Texas, according to a research report released by UBS. The project, located in Abilene, Texas, is expected to deploy 400,000 NVIDIA GB200 GPUs, which at current pricing translates to approximately 200 billion dollars in sales revenue. This significant investment is driven by the growing demand for advanced computing capabilities, particularly in the AI sector.

The data center is set to host 100,000 GPU clusters in its first phase, with Oracle's cloud infrastructure (OCI) playing a crucial role. This initial deployment is projected to generate at least 20 billion dollars in revenue for Oracle. As OpenAI continues to expand its computational capabilities through partnerships with Oracle, Microsoft, and CoreWeave, the project is expected to bring in an additional 50 billion dollars in network equipment revenue.

For OpenAI, the "Stargate" data center is of paramount importance. Recent GPU shortages have forced OpenAI to limit the usage of its ChatGPT service due to surging demand. The new supply from the Abilene data center is anticipated to help OpenAI accelerate its technological advancements and regain growth momentum. Analysts Karl Keirstead, Timothy Arcuri, and Radi Sultan from UBS highlight that as OpenAI seeks greater control over its infrastructure, the scale of the "Stargate" project could reshape the competitive landscape for AI infrastructure providers.

Investors should closely monitor this development, as NVIDIA's GPUs and Oracle's cloud services are at the core of the United States' 500 billion dollars AI strategy. Securing long-term, large-scale orders from the "Stargate" project could fundamentally alter the growth trajectories of both companies, positioning them as leaders in the AI infrastructure market. The project not only underscores the strategic importance of AI and data centers but also highlights the potential for significant revenue generation and market dominance for the companies involved.