Oracle does not have any proprietary IP that OpenAI depends on. That means Oracle is providing commodity services to OpenAI.

AI hardware is advancing rapidly. If NVIDIA's next generations deliver radically more tokens per watt and per dollar, an Oracle facility designed, financed, and contracted around an older GPU generation can be overtaken before it is fully online or fully monetized.

That's a big risk.

And to finance this they are making deep cuts to the ERP business where Oracle does have proprietary IP.

> If NVIDIA's next generations deliver radically more tokens per watt and per dollar,

> an Oracle facility designed, financed, and contracted around an older GPU

> generation can be overtaken before it is fully online or fully monetized.

Every user of Nvidia's gear has thought of this, and Nvidia provides a solution: Newer components are (usually) compatible with older racks, and Nvidia will buy back parts you replace with newer hardware.

For example, let's say you have an NV72 with Blackwell-ultra. Rubin comes out, and you decide you want to upgrade. There is a SKU of Rubin designed specifically to work in the racks shipped with Blackwell. Use it, and you only need to replace the compute board (not the power system, cooling, networking, etc.)

Nvidia will buy back the Blackwell boards you remove (and sell them to someone else, with a warrantee).

If you want to do an upgrade that increases power use, you may have to get a new rack. All of the parts are modular, and all parts can be sold back to Nvidia.

Nvidia does this because they have to. Without it, many customers would consider other vendors when upgrading, or delay purchases in case something better comes along later.

I'm no fan of Oracle, but you could make the same claim about land developers, or datacenter operators, or REITs. Or a random conglomerate like Unileaver or GE or Siemens.

Ultimately, someone has to provide "commodities", and if you think your ship is the right vessel to do it betting hard on this is some kind of strategic direction.

Whether they are right, and to what extent debtors and the market will put up with cyclic and performance issues, etc.. I certainly won't hold the stock, but I wouldn't have earlier either.

This previous [flagged] post implies that a natural gas line blocked by regulatory action is holding an Oracle data center offline:

https://news.ycombinator.com/item?id=49978367

https://archive.ph/jDXdm

I understand that trucking the natural gas into the generation plant is one workaround.

"For this whole layered scheme [of Project Jupiter] to work, the campus needs as much power as a major city — think Los Angeles. Hooking into the existing grid turned out to be a problem. The workaround: generate power on site with fuel cells running on natural gas.

”The gas is supposed to come through a new pipeline spur that still has to be built. Most of the route crosses federal land, but about half a mile runs across state land. And that’s exactly where everything got stuck: on March 31, 2026, the New Mexico State Land Office denied the right-of-way, and on July 16 it rejected the second application. The pipeline, originally due to go online in August 2026, has been pushed back to February 2027.

”On top of that, the air permit for the entire power system still hasn’t been issued: the state Environment Department’s decision isn’t expected before November 23.

”Meanwhile, local opposition keeps gaining ground — as does the nationwide movement against hyperscale data centers."

Rubin is supposed to be 10x ... I hope b300 prices crash and I can pick up a few

Sometimes I wonder if the people committing and spending this much money is really thinking about this or not?

My feeling is there is some kind of upgrade packaging done here. Like if the chips advance by X factor it can be offered at a massive discount or something? Otherwise it seems so silly to buy so much hardware which is evolving so fast.

larry's big ego couldn't take it - being left out of the hypetrain.

he was living good - enjoying massive profits from his various moats but nah he had to risk it for the paramount deal, then stargate.

ERPs are done. Data center permits, space, contracts to buy scarse GPUs and energy are the moats today. The chips can provide more tokers per watt but the world needs exponentially more tokens each day

>Oracle does not have any proprietary IP that OpenAI depends on. That means Oracle is providing commodity services to OpenAI.

Huh? Is Oracle's plan with this funding to provide compute services for the big AI specialist companies? I assumed it was a buildout for their own AI services, as you're right, the former wouldn't make sense. (At risk of making a trollish, low-effort comment, OpenAI/Anthropic are savvy compute users and would have to be insane to risk getting entangled with Oracle.)

I read the article and I couldn't tell from it which of these is the case.

On strictly business terms, you're absolutely correct. Considering that OpenAI and Oracle both eat from Trump's hand though, I think that Larry Ellison has a few tricks up his sleeve to remain a "necessary" contractor. This is probably a shorter-term investment to pad out the coffers 5-10 years from now.

If rampant despotism is the end-goal, Oracle has already aligned themselves with the despots.