The race to dominate artificial intelligence infrastructure has taken a significant turn with the expanded partnership between Oracle and OpenAI, targeting an ambitious 4.5 gigawatts of data centre capacity in the United States. This development, part of the broader Stargate Project, signals a monumental push to support the computational demands of next-generation AI workloads. With Oracle reportedly committing to supply millions of high-performance chips from industry leaders like NVIDIA and AMD, the scale of this initiative underscores the critical role of raw computing power in maintaining technological leadership. This partnership could reshape the competitive landscape for cloud and AI services, with implications for investors and industry players alike.
The Stargate Project: Scale and Ambition
Announced earlier in 2025, the Stargate Project represents a collaboration between OpenAI, Oracle, and other key stakeholders like SoftBank, with a staggering investment commitment of $500 billion over four years to build AI infrastructure across the US. The latest expansion, revealed in July 2025, aims to develop an additional 4.5 gigawatts of data centre capacity, a ninefold increase over prior agreements. For context, 4.5 gigawatts is sufficient to power millions of households, highlighting the sheer energy demands of modern AI systems. Reports indicate that Oracle will supply approximately 2 million AI chips to fuel these data centres, primarily sourced from NVIDIA and AMD, positioning this as one of the largest hardware deployments in recent history.
The project’s initial phase includes plans for a smaller data centre, potentially in Ohio, to be completed by the end of 2025, with larger facilities to follow. A significant portion of the infrastructure will be housed in a Texas data centre campus in Abilene, where Oracle has already committed to deploying 400,000 NVIDIA GB200 AI chips. The energy requirements for such clusters are immense, with estimates suggesting that even a fraction of this capacity could exceed 1.2 gigawatts of power draw, raising questions about sustainability and grid reliability in the regions targeted for development.
Financial and Strategic Implications for Oracle
Oracle’s role in this partnership is a strategic pivot towards becoming a linchpin in the AI ecosystem. The company has reportedly placed orders worth $40 billion for NVIDIA GPUs alone, a figure that reflects both the high cost of cutting-edge hardware and Oracle’s confidence in the long-term demand for AI computing. Based on Oracle’s financials for Q1 2025 (January to March), cloud services and licence support revenue grew by 9% year-over-year to $10.2 billion, indicating a robust foundation for further investment in data centre infrastructure. This contrasts with Q1 2023, where cloud revenue growth was a more modest 4%, underscoring the accelerating shift towards AI-driven services in Oracle’s portfolio.
However, the capital expenditure required for Stargate could strain Oracle’s balance sheet if not offset by corresponding revenue growth. The company’s total debt stood at $86.4 billion as of the latest filings in Q1 2025, and while cash flows from cloud operations remain strong, the scale of this project introduces financial risk. Investors will be watching closely to see if Oracle can translate this infrastructure push into market share gains against competitors like Amazon Web Services and Microsoft Azure, both of whom are also aggressively expanding their AI capabilities.
Impact on NVIDIA and AMD
The supply of 2 million chips to power Stargate places NVIDIA and AMD at the heart of this infrastructure boom. NVIDIA, in particular, stands to benefit, with its GB200 chips forming the backbone of the Texas data centre. For Q2 2025 (April to June), NVIDIA reported data centre revenue of $26.3 billion, a 154% increase year-over-year, driven by demand for AI training hardware. This compares starkly to Q2 2023, where data centre revenue was $10.3 billion, illustrating the explosive growth in this segment. AMD, while a smaller player in the AI chip market, is also poised for gains, with its Instinct MI300 series chips gaining traction. AMD’s data centre revenue for Q2 2025 reached $2.8 billion, up 115% from the prior year, though it remains a fraction of NVIDIA’s dominance.
Below is a summary of key financial metrics for the chip suppliers involved:
| Company | Segment | Q2 2025 Revenue ($bn) | YoY Growth (%) |
|---|---|---|---|
| NVIDIA | Data Centre | 26.3 | 154 |
| AMD | Data Centre | 2.8 | 115 |
Broader Industry and Economic Context
The Stargate Project is not merely a corporate venture; it carries significant economic implications. Proponents argue it could create over 100,000 jobs in the US, spanning construction, engineering, and operations. This aligns with broader policy goals to re-industrialise key regions and secure technological sovereignty in AI. However, the energy demands of 4.5 gigawatts of computing capacity pose challenges. Data centres already account for approximately 2% of global electricity consumption, and projects of this scale could exacerbate local grid constraints, particularly in states like Texas, which have faced reliability issues in recent years.
Moreover, the competitive landscape for AI infrastructure is heating up. Companies like xAI and Meta Platforms are also investing heavily in large-scale data centre clusters, suggesting that Oracle and OpenAI will face pressure to deliver not just capacity, but efficiency and innovation. Sentiment on platforms like X, including observations from accounts such as FinFluentialx, reflects a mix of optimism about the project’s potential and concern over execution risks, particularly regarding energy supply and cost overruns.
Conclusion: A High-Stakes Bet on AI’s Future
The Oracle-OpenAI partnership through the Stargate Project is a high-stakes endeavour that could redefine the boundaries of AI infrastructure. With 4.5 gigawatts of capacity and millions of chips in play, the initiative is a testament to the insatiable demand for computing power in the AI era. Yet, the financial, logistical, and environmental challenges are formidable. For Oracle, success could cement its position as a critical player in cloud and AI services; for NVIDIA and AMD, it reinforces their centrality to technological progress. As this project unfolds through 2025 and beyond, its outcomes will likely serve as a barometer for the broader industry’s ability to scale responsibly in the face of unprecedented demand.
References
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- The Asahi Shimbun. (n.d.). Retrieved from https://asahi.com/ajw/articles/15919776
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- The Register. (2025, May 27). Oracle, OpenAI said to be cooking up $40B Nvidia order. Retrieved from https://www.theregister.com/2025/05/27/oracle_openai_40b/
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