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Home » Oracle and OpenAI Are Rocking AI World with $500-Billion Stargate Startup
AI and Copilots

Oracle and OpenAI Are Rocking AI World with $500-Billion Stargate Startup

Bob EvansBy Bob EvansJune 3, 20256 Mins Read
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In just a few short months, the audacious team of OpenAI’s Sam Altman and Oracle’s Larry Ellison has pushed its highly ambitious Project Stargate AI vision and execution far beyond what seemed possible just a year ago with the buildout of the world’s largest AI training site, rapid global expansion into Middle East, massive purchase commitments with NVIDIA, and the displacement of Microsoft at the top of the AI food chain.

Before digging into each of those developments, I want to be sure to acknowledge the third major player in the Stargate brain trust — Softbank CEO Masayashi Son. While Son has pledged $100 billion in funding for Stargate, Altman and Ellison and their companies are the intellectual and visionary dynamos behind Stargate, which Son, Altman, and Ellison announced at the White House with President Trump in late January. For more on that, please see:

  • “Larry Ellison and Stargate AI Will Shatter the Tyranny of ‘Impossible’“
  • “Larry Ellison and Stargate AI: Redefine Possible//Impossible“

What Ellison and Altman have engineered since that Jan. 22 announcement — not even 4½ months ago — is remarkable because not only does it set a blistering pace for what Stargate hopes to achieve but it also will force every other major AI player and partner and hyperscaler to dramatically scale up their own plans. 

Here are four perspectives on why and how the Altman-Ellison combo is turning the AI world upside-down with Stargate.

1. Abilene, TX, will never be the same. A city of about 130,000 people situated 180 miles west of Dallas, Abilene is the site of a massive construction project that will become the world’s largest AI training site, according to Oracle. While Oracle and OpenAI have not been terribly forthcoming with details about the Stargate facility, this screenshot from a video Oracle posted on LinkedIn in mid-May gives an idea of the colossal scale of the effort:

Stargate Abilene construction site as shown in screenshot from LinkedIn post by Oracle

Not content to let others have all the fun, Altman recently joined Oracle executive vice-president Clay Magouyrk at the site, and the 30-second video Oracle has posted and from which this screenshot was taken offers some titillating glimpses of what’s to come:

Oracle Cloud Infrastructure EVP Clay Magouyrk and OpenAI CEO Sam Altman at Stargate Abilene construction site — “the largest AI training site in the world” — as shown in screenshot from LinkedIn post by Oracle

2. From Abilene to Abu Dhabi. Stargate UAE brings in partner G42.ai, which will build the enormous facility in Abu Dhabi that Oracle and OpenAI will operate. As the oil-rich nations of the Middle East look to branch out into technology, Stargate UAE has the opportunity to be at the forefront of that extraordinary transformation.

Describing the significance of this expansion, Altman, Ellison, and Son each offered some bracing perspectives in the G42 press release:

  • Altman: “This is the first major milestone in our OpenAI for Countries initiative — our effort to work with allies and partners to build AI infrastructure around the world. It’s a step toward ensuring some of this era’s most important breakthroughs — safer medicines, personalized learning, and modernized energy — can emerge from more places and benefit the world.”
  • Ellison: “This first-in-the-world platform will enable every UAE government agency and commercial institution to connect their data to the world’s most advanced AI models. This landmark deployment sets a new standard for digital sovereignty and demonstrates how nation states can harness the power of the most important technology in the history of humankind.”
  • Son: “When we unveiled Stargate in the U.S. with OpenAI and Oracle, we set out to build an engine for the next information revolution. Now, the UAE becomes the first nation beyond America to embrace this sovereign AI platform, proving the global nature of this vision.”

3. NVIDIA playing essential role. Recent news reports have stated that Oracle has committed to purchasing $40 billion of NVIDIA GPUs for the Abilene AI-training data center. While Oracle has declined to comment on the reports, this analysis from theregister.com offers a thorough overview and raises the critical issue of whether sufficient electricity can be generated to power the colossal facility. This reported Oracle-NVIDIA engagement called to mind for me some comments made by Ellison several months ago during a financial analysts meeting at Oracle CloudWorld in Las Vegas. Ellison described a very recent dinner he and Elon Musk had with NVIDIA CEO Jensen Huang at which, Ellison said with a hearty laugh, both he and Musk were “begging” Huang for more NVIDIA hardware to meet the rapidly escalating demands of Oracle and also of Musk’s xAI company. Makes you think: In the face of such pleading from two of the richest men in the world, how could Huang resist such an appeal?

4. Altman tells Microsoft, “It’s not you — it’s me.” After a multi-year monogamous relationship with Microsoft, OpenAI is clearly looking to align itself with powerful partners that can support Altman’s soaring vision for what AI can do. As of now, it looks like Oracle and Ellison — who’s probably the best such ally Altman will ever find because of Ellison’s unmatched ability to not just predict but indeed create the future — are giving Altman more than enough to match his ambitions. At the same time, OpenAI and Microsoft continue to work together on a number of fronts, and Microsoft’s recent fiscal Q3 earnings results show the company’s AI business is doing just fine.

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Nevertheless, I can’t help but believe that the combination of (1) Altman’s very deliberate move away from the monogamous Microsoft relationship and (2) Altman’s consequent blockbuster relationship with Oracle and Ellison is a reputational setback for Microsoft. While Satya Nadella’s company continues to innovate ambitiously and grow at an extraordinary pace for a company of its size, Altman’s desire to play the field and find partners more aligned with his hugely ambitious view of the AI future shows that for all its might and mass and muscle, Microsoft is not invincible or all-powerful. I believe this flip from Altman and Nadella to Altman and Ellison is a blow to Microsoft’s prestige, and one that will make customers think long and hard about where and on whom to place future bets.

Final Word

Larry Ellison has often said that if people are not calling you crazy fairly often, then you’re not innovating and dreaming boldly enough. Take another look at the aerial photograph of the Stargate Abilene construction site, and ask yourself if that’s not at least kinda crazy.

Then think of another one of equal size going up in Abu Dhabi, notable for many reasons but until very recently not exactly synonymous with some of the world’s most-advanced technology. Is it not at least a little crazy for Ellison and Altman to begin their global expansion in such a place?

Maybe it is.

And maybe Sam Altman chose to leave the cozy confines of his exclusive partnership with Microsoft precisely because he wanted to get a little crazy.

If so, Larry Ellison is exactly the kind of crazy Altman was looking for.

This should be a very fun ride — buckle up!


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Bob Evans

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Cloud Wars Founder Bob Evans actively analyzes the Cloud and AI categories through video reports, in-depth analyses, and interviews with the Cloud and AI market’s leaders and innovators. He’s also the creator of the Cloud Wars Top 10, a ranking and ongoing analysis of the world's most influential tech companies driving digital business and the digital economy. Bob is recognized as a world-class strategic communicator focused on emerging business strategy, disruptive innovation, and forward-looking leadership.

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