Larry Ellison is the Chairman of the Board. Oracle (NYSE: ORCL)which is currently building some of the world’s fastest and most cost-efficient data centers to develop artificial intelligence. On the other hand, Elon Musk runs Tesla (NASDAQ:TSLA)He is working on building AI-powered self-driving software for his electric vehicles, and runs SpaceX, X (formerly Twitter), and a new AI startup called XAI.
Ellison and Musk need Tens of thousands From graphics processors (GPUs) to their data centers to bring AI to life, Nvidia (NASDAQ: NVDA) Offering the best chips in the industry.
At Oracle’s analyst meeting on Sept. 12, Ellison told the audience that he and Musk recently went to dinner with Nvidia CEO Jensen Huang at Nobu in Palo Alto. The two, who are among the richest people on Earth, found themselves begging Huang for something that money can’t buy right now. Here’s how it happened.
Arms Race for GPUs
Oracle currently has 162 data centers either active or under construction, but believes that number is It may eventually reach 2000. Because the demand for computing power is artificial intelligence The number of developers is growing. Some of Oracle’s largest data centers feature clusters of more than 32,000 GPUs, but next year the company will introduce a cluster of 131,072 GPUs from Nvidia’s latest Blackwell cluster.
Oracle has designed a unique networking technology based on RDMA (Random Direct Memory Access) that can move data from one point to another much faster than traditional Ethernet networks, and since developers pay for computing power by the minute, this can dramatically reduce costs. That’s why leading AI companies like OpenAI, Cohere, and even Musk’s own xAI are using Oracle’s infrastructure.
In the first quarter of fiscal 2025 (ended July 31), Oracle’s cloud infrastructure (OCI) segment generated $2.2 billion in revenue, a whopping 45% increase from the same period last year. However, it could have grown even faster if there weren’t supply constraints—in other words, Oracle simply can’t get enough GPUs for its data centers.
Oracle does not compete with other cloud giants like Microsoft, Amazonand alphabet As for Nvidia’s GPU allocations, tech companies like Tesla and Meta platforms Companies are also looking to take advantage of the offer to develop AI for their own purposes. Tesla is trying to put a cluster of 50,000 GPUs online this year to power its self-driving software, which requires a lot of computing power.
Meta, on the other hand, has used about 16,000 of Nvidia’s flagship H100 GPUs to train its Llama 3.1 large language model (LLM), but the company plans to ramp up to 600,000 H100-equivalent units by the end of this year. That would pave the way for Llama 4, which CEO Mark Zuckerberg says could set the industry standard in 2025.
Ellison and Musk demand more GPUs
Please take our money… take more of it. You’re not taking enough… we need you to take more of our money. Please.
— Ellison and Musk’s comments to Jensen Hwang at dinner, according to Ellison.
Ellison and Musk have been begging Huang for more GPUs, but no amount of money in the world can buy the numbers they need now because Nvidia simply can’t keep up with demand. Oracle and Tesla aren’t even Nvidia’s biggest customers!
Oracle spent $6.9 billion on capital expenditures during fiscal 2024 (ending April 30), and expects to spend $6.9 billion on capital expenditures. double In fiscal 2025, most of the money will go to buying chips and building data centers. Tesla plans to spend more than $10 billion on capital this year, which will also go to the 50,000 GPUs I mentioned earlier.
Those numbers are modest compared to what other tech giants are spending. Microsoft has budgeted $55.7 billion for capital spending in fiscal 2024 (which ended June 30), and plans to spend even more in fiscal 2025. Amazon, on the other hand, could top $60 billion in capital spending in 2024.
So it’s no surprise that Nvidia generated $26.3 billion in data center revenue in the second quarter of fiscal 2025 (ended July 28), up 154% from the same period last year. Ellison says the AI spending spree is likely to continue for the next decade as companies and countries compete for technological supremacy when it comes to AI, so Nvidia’s data center revenue probably has plenty of growth left.
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You won’t believe what Larry Ellison and Elon Musk told NVIDIA CEO Jensen Huang Originally posted by The Motley Fool