US technology company Oracle is spending “billions” of dollars on chips from Nvidia, which designs and manufacturers artificial intelligence hardware and software graphics processing units for various industries, as it seeks to strengthen its position in generative AI and cloud computing.
The Texas-headquartered company plans to purchase bulk stocks of GPUs to build fast networks capable to produce AI platforms similar to OpenAI’s ChatGPT and Google’s Bard.
“We will buy GPUs from Nvidia, and we are buying billions of dollars of those,” Reuters quoted Oracle’s chairman and chief technology officer Larry Ellison as saying.
Oracle’s stock was trading 0.32 per cent up at $116.90, while Nvidia was trading 1.17 per cent up at $416 a share in pre-market trading on Thursday.
In October, Oracle announced a multiyear partnership with Nvidia to boost its cloud infrastructure.
Under the partnership, Oracle said it will use tens of thousands of Nvidia's GPUs to accelerate the pace of computing and AI advancements in its cloud infrastructure.
GPUs can process various tasks simultaneously, making them useful for machine learning, video editing and gaming applications.
However, Mr Ellison said that Oracle will spend more on purchasing central processor units from AI start-up Ampere Computing and semiconductor company Advanced Micro Devices.
“We will spend three times that [money spent on Nvidia chips] on CPUs from Ampere and AMD. We still spend more money on conventional compute,” he added.
In 2019, Oracle invested $40 million in Ampere, which was founded in 2017 by Renee James, who worked at chip giant Intel for nearly 28 years.
Earlier this month, in a bid to boost its generative AI capabilities, Oracle also partnered with AI start-up Cohere, which was founded by former Google engineers.
Through the partnership, Cohere will train, build, and deploy its generative AI models on Oracle cloud infrastructure.
Generative AI is currently disrupting industries across the board. A type of AI system that can generate text, images or other media, it uses neural networks to identify patterns and structures within existing data to generate new and original content.
It could add as much as $4.4 trillion annually to the global economy and will transform productivity across sectors with continued investment in the technology, a recent report by consultancy McKinsey found.
Mr Ellison, 78, who stepped down as Oracle’s chief executive in 2014, has a net worth of $130 billion, according to the Bloomberg Billionaire Index. He is currently ranked fifth on the list.
However, earlier this month, he edged past Microsoft founder Bill Gates briefly to become the fourth richest person, after the company reported a more than 3 per cent annual increase in its 2023 fiscal fourth-quarter net profit to $3.3 billion.
It was the first time Mr Ellison had surpassed Mr Gates and was ranked among the top four on the list.
