Oracle to Buy $40 Billion Worth of Nvidia Chips for First Stargate Data Center | PYMNTS.com

Oracle will reportedly buy $40 billion worth of Nvidia’s chips to power the first Stargate project, a new data center in Abilene, Texas.

The company will buy 400,000 of Nvidia’s latest “superchips” for training and running artificial intelligence (AI) systems, the GB200 chips, and lease the computing power they provide to OpenAI, the Financial Times (FT) reported Friday (May 23).

The data center is expected to be fully operational by the middle of 2026 and will be one of the largest data centers in the world, providing 1.2 gigawatts of power, according to the report.

President Donald Trump announced Stargate in January, saying the up-to-$500 billion project aims to build big AI-focused data centers in the U.S., with the first 10 being in Texas.

Oracle, OpenAI, SoftBank and MGX are equity partners in Stargate, while Oracle, Arm, Microsoft, Nvidia and OpenAI will be the project’s initial technology partners.

It was reported Wednesday (May 21) that the Abilene data center had secured $11.6 billion in funding commitments and that the funding would expand the data center to eight buildings from two and bring the total amount secured for the project to $15 billion.

AI data centers are needed because traditional data centers and power grids are struggling to accommodate the intense computational power, data storage and energy required by AI, PYMNTS reported in January.

“AI data centers are fundamentally different because they require specialized hardware and infrastructure to handle the massive parallel processing needed for AI workloads,” Deborah Perry Piscione, co-founder of Work3 Institute, an AI and Web3 advisory firm, told PYMNTS in January.

“Traditional data centers focus on storage and basic compute, while AI facilities need dense configurations of GPUs and AI accelerators, like Nvidia’s H100s, designed specifically for the complex matrix calculations that power AI models,” she added.

In March, Elon Musk’s xAI and Nvidia joined the $30 billion AI Infrastructure Fund backed by BlackRock, Microsoft and MGX. The Fund’s ultimate goal is to raise up to $100 billion for AI development. Microsoft and BlackRock launched the fund last year, aiming to raise money to construct data centers and find sources of power for those facilities.