Oracle expands OpenAI partnership and broadens OCI AI chip options

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Oracle expands OpenAI, OCI AI chips

Highlights

Oracle expanded its OpenAI partnership, integrating ChatGPT and Codex into Oracle applications to enhance database usability for enterprise users.
Oracle broadened its OCI hardware options to include Google's tensor processing unit chips, OpenAI's Jalapeño chip, and Cerebras systems, offering more AI accelerators amid ongoing chip scarcity.
Oracle continues multibillion-dollar data center projects like Project Jupiter while investors focus on fiscal 2030 revenue targets, cloud margins, and funding as Oracle shares fell over 30% this year.

AI software tie-up and cloud hardware expansion

As reported by CNBC, Oracle said Tuesday that its expanded collaboration with OpenAI will bring ChatGPT and Codex into the company's applications, with the goal of making databases more actionable for enterprise users. Mahesh Thiagarajan, Oracle's president of Cloud Infrastructure, said at Oracle AI World in Las Vegas that ChatGPT can help users build, deploy and manage applications more easily.

The announcement also extends to Oracle's cloud hardware portfolio. Oracle said it is making additional accelerators available through OCI, including Google's tensor processing unit chips, OpenAI's Jalapeño chip and Cerebras systems, giving customers a wider range of infrastructure options for AI workloads.

Thiagarajan said chip scarcity remains an ongoing issue and that customers such as OpenAI benefit from having different accelerators to choose from. He said the broader lineup does not mark a shift away from Nvidia GPUs, describing Nvidia's chips as the most fungible while adding that the AI market remains large enough to support multiple hardware approaches.

Oracle said Google's custom chips will run on another hyperscaler's cloud for the first time, highlighting how major technology groups are seeking more routes to place their AI hardware with frontier model developers. A Cerebras spokesperson said its arrangement with Oracle is material, but declined to disclose the scale because the company is in a quiet period.

Data center pipeline and investor focus

For Oracle, the OpenAI expansion arrives as the company continues to build out a large digital infrastructure pipeline tied to rising enterprise AI demand. Thiagarajan said his team observed OpenAI's GPT-6 Astra model being trained at Oracle's Stargate data center campus in Abilene, Texas, which he cited as evidence of real-time performance benefits.

Thiagarajan also addressed Oracle's multibillion-dollar New Mexico data center project, known as Project Jupiter, which is facing local opposition. He said Jupiter is one of 30 to 40 data center projects the company has in development per quarter, and Oracle maintains that the project remains on schedule even after sending a force majeure notice to backer Blue Owl Capital last month.

A hearing on air quality permitting for the Sunland Park site is scheduled for Dec. 7, after the project already broke ground. The company's infrastructure plans are likely to remain in focus ahead of Oracle's investor day, where market participants are expected to seek more detail on fiscal 2030 revenue targets, cloud deal margins and the financing of its expansion, with Oracle shares down more than 30% this year.

Our earlier article on the U.S. AI data-center buildout highlighted how soaring project costs, delays and grid constraints are putting the $10 trillion infrastructure boom under pressure. We noted that only a minority of planned developments are seen as truly credible, as tighter financing conditions and growing local resistance raise the risk that developers fail to deliver capacity on time and on budget.

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