Nvidia stock has tripled this year as investors bet the AI boom will fuel demand for graphics chips.
Oracle’s Larry Ellison said Elon Musk’s xAI wanted more Nvidia chips than it could offer last quarter.
Oracle is spending heavily on scaling up to meet intense demand from clients like Musk.
Nvidia stock has more than tripled this year as investors bet the graphics-chip specialist will power the artificial-intelligence revolution. Elon Musk is among those who can’t get enough of its semiconductors, Oracle’s Larry Ellison said on Monday.
Musk has opted to use Oracle’s servers to run his xAI company’s recently launched chatbot, Grok. The cloud-infrastructure giant managed to provide enough Nvidia chips to power the first version of Grok, but fell short of Musk’s demands, Ellison said during Oracle’s latest earnings call, according to a transcript provided by AlphaSense/Sentieo.
“Boy, did they want a lot more GPUs than we gave them,” Oracle’s billionaire cofounder and tech chief said. “We gave them quite a few but they wanted more, and we are in the process of getting them more.”
“They were able to use it, but they want dramatically more as there’s this gold rush towards building the world’s greatest large language model,” Ellison, one of Tesla’s biggest shareholders, continued. “And we are doing our best to give our customers what we can this quarter, and then dramatically increase our ability to give them more and more capacity each succeeding quarter.”
Ellison gave the example of xAI after a Wall Street analyst questioned Oracle’s plans to build 100 new cloud data centers, up from around 66 today. Ellison noted that Microsoft alone has ordered 20 data centers to support its Azure cloud-computing platform, and Oracle wants to build many others to meet demand from its direct customers.
Oracle CEO Safra Catz struck a similar tone, saying that the company held back last quarter to make sure it could provide larger-scale services going forward. There was “hundreds of millions of dollars” waiting to be scooped up, she said, but Oracle left it on the table so it could focus on building capacity “because we need more and we need it bigger.”
Musk has been loading up on Nvidia chips for his companies for a while now. Business Insider’s Kali Hays reported in April that he had purchased 10,000 graphics processors for xAI. The Tesla CEO also said on an earnings call in July that the EV maker was buying as many as it could.
“We’re using a lot of Nvidia hardware,” he said. “We’ll actually take it as fast as they’ll deliver it to us. Frankly, if they could deliver us enough GPUs, we might not need Dojo. But they can’t. They’ve got so many customers.”
Ellison’s latest comment about Musk and xAI suggests demand for graphics chips remains intense, which is welcome news for Nvidia investors.
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