The Next AI Contender

The race to build out computing power to meet booming AI demand is currently underway.

The best way to gauge that expected growth is through power consumption expressed in gigawatts (GW).

By 2030, U.S. data center power consumption is expected to reach 35 GW, doubling from 17 GW required in 2022. This expansion is fueled by AI-driven requirements for higher power densities and more advanced cooling systems, particularly in hyperscale data centers that serve large-scale cloud services​.

 So far, the market’s attention has largely focused on Amazon.com Inc (NASDAQ: AMZN), Alphabet Inc. (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT).

But after stunning earnings results last quarter, Oracle Corp. (NYSE: ORCL) has joined the ranks of these Big 4 tech companies as a legitimate contender staking a claim in the AI data center space.

On September 10, Oracle reported a 45% jump in revenue from its Oracle Cloud Infrastructure (OCI) business line for the latest quarter.

It also announced a new database partnership with Amazon Web Services.

Plus, Oracle and The King of the AI Hill – Nvidia – are collaborating to win the AI race.

On Wednesday, September 11, at the Oracle CloudWorld conference, the King of the Hill and The Contender announced that Oracle’s OCI business segment would deploy the largest-ever GPU compute cluster.

At over 131,072 Nvidia Blackwell GPUs for customers to train and run AI workloads.

This will deliver computing power for customers to train and run AI models six times larger than what other cloud companies can bring to bear.

For context, Meta trained its latest Llama 3 model with only 16,000 Nvidia GPUs.

For a deep dive into Nvidia’s financials and valuation, check out this Capital InFocus report.

Oracle’s co-founder Larry Ellison expects his company to be among the few tech titans and one country in a position to battle it out for AI technical supremacy. One of its data centers currently under construction will demand 800 megawatts to power “acres of NVIDIA GPU clusters.” It’s designing another gigawatt center powered by nuclear reactors.

The company expects to build 100 new data centers over the next 10 years.

I’ve shown you Oracle’s ability to deliver competitive profits. I’ve also broken down for you how much Oracle’s stock price depends on future profit growth.

And in my latest Capital InFocus report, I’ll walk you through Oracle’s financial metrics to highlight what you’re paying for and why.

Oracle has proven itself a powerful contender in the race to dominate AI. Check out this report now to see how it stacks up against the competition.

Think Free. Be Free.

Don Yocham, CFAManaging Editor of The Capital List