OpenAI is walking away from expanding its Stargate data center with Oracle

motbus3

Omg. Oracle taking greedy bad decisions with tax payer money? No way!

jmclnx

to me, seems the page is gone. This could be a related item: https://www.msn.com/en-us/money/general/as-oracle-plans-thou...

sowbug

What happens to older datacenter GPUs? Do they have a second life somewhere outside of datacenters? I could see Nvidia adding terms of sale requiring disposal rather than resale.

mcs5280

The only thing that matters is stonk++

chb

Is it possible that the supply of used GPUs available to home builders will somehow increase as the result of this?

advisedwang

Perhaps oracle going bust can be the silver lining to an AI bubble bursting

wmf

I don't believe that Stargate is "yesterday's data center". It's being built in multiple phases and Oracle has access to Nvidia's roadmap. They know 200 kW/rack is coming. The newer phases could easily be built out to support Rubin and Feynman.

hristov

What the article did not mention is that oracle founder, executive chairman and biggest stockholder larry ellison is currently bankrolling his kid David's bid to monopolize the entire US news industry so that they are more friendly to Trump, Netanyahu and various other right wing ideologists. David Ellison is fueling his buying spree with debt guaranteed by his dad's oracle shares. The various assets David has bought are already suffering losses of viewership because viewers are turned off by their new ideological slant. Usually debt investors are not worried if the stock price is high. Debt has precedence over equity, so if the stock price is riding high, the CEO can always be convinced to print more shares to service the debt. The Oracle stock price has not been doing that hot lately, however. As the article said, it is 50% down. Still ORCL has 430 Billion market cap in comparison with 130 Billion of debt. It seems manageable. But stock prices can move very fast. Ironically, the war in Iran, which David's new news sources keep supporting is causing ORCL stock to go down which can bring down David's new media empire. David just purchased Warner Bros for about 110. A lot of that (40 billion) is also guaranteed by daddy's ORCL shares. Warner Bros owns Comedy Central, which sadly has been one of Americas most dependable news sources. The house of cards is still standing but its getting awfully wobbly.

christkv

This is general compute hardware as I understand it. It will not go unused no matter what happens. If new algorithms appear that reduce the number of calculations needed per token for an llm they are probably still good. It's not like silicon advances are accelerating. If it's built in stages each state will have never variants of hardware I imagine.

yalogin

This is a pretty damning headline and we are still talking about Blackwell. I guess that is how fast the whole segment is moving but OpenAI and only looking for the most advanced chips feels more like an excuse to walk away from this deal rather than a problem with the stack and oracle. Feels to me that OpenAI is cutting down on commitments and cost as it doesn’t see the revenue pipeline building. May be someone with more knowledge of the reality can comment and correct me

dzonga

>> Oracle is the only one using debt to build the data center Stargate is backed by the US gvt hence why they're comfortable to put that under debt financing

maxdo

The missing part is that current gpus are already money making machine in 2026 , and you need just to serve that . I’m sure this is a procurement take between nvidia and such a big vendor as oracle

mikelitoris

I hope the lawnmower goes bankrupt with this and the hostile WB take over.

sega_sai

Wow, I just saw in the article that NVIDIA called a new chip Vera Rubin ( https://en.wikipedia.org/wiki/Vera_Rubin , also https://en.wikipedia.org/wiki/Vera_C._Rubin_Observatory ). How is it allowed for a commercial company to assign a name of a known person to a product ?

reissbaker

I run a small open source LLM inference company, Synthetic.new. As far as I can tell, CNBC isn't reporting this accurately: the problem isn't that Oracle is building "yesterday's data centers": they're building Blackwell DCs! Those are today's DCs. The problem appears to be that Oracle is building today's DCs... Tomorrow. And by the time they come online, Vera Rubins will be out, with 5x efficiency gains. And Oracle is unlikely to want to drop the price of Blackwells 5x, despite them being 5x less efficient. It's a little unclear to me how bad this is. Nvidia's "rack scale" machines like GB200-NVL72s and GB300-NVL72s are basically a fully built rack you roll into a DC and plug into power and network. In that case, Oracle should probably just buy the rack-scale Vera Rubins when they come out instead of Blackwells and roll them into their new DCs. Tada! Tomorrow's DCs, tomorrow. OTOH it's possible someone at Oracle screwed up and committed to buying Blackwells at today's prices, delivered tomorrow. Or maybe construction of the physical DCs is behind schedule, so today's Blackwells are sitting around unused, waiting for power and networking tomorrow. Then they're in a bit of trouble. Regardless, CNBC's reporting seems pretty unclear on what actually happened and whether this is actually bad or not.

mgilroy

I think the more interesting question is how much longer does oracle have and at what point does a hostile takeover make sense. Their databases are heavily used in government, banking and other large industries which have been slower to adapt to change and strugglyto migrate away. At what point does purchasing oracle to gain customer share, existing data centres and the opportunity to migrate to your cloud platform make more sense than competing? They still have a high market value. However, the debt they will need to service will result in ongoing price increases which will encourage people to migrate away. Over time they will struggle to service the debt and a buyout will be the best of the bad options.

yibg

Not directly related to the article itself, but aren't all debt by definition tomorrow's debt? i.e. debt is money to be paid off in the future.

cavisne

This feels a bit overdone. OpenAI has had problems with every compute partner they've ever had. It's just not a solvable problem, who would they go to to allegedly get next-gen chips quicker?

tflinton

F** oracle.