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Oracle is building yesterday's data centers with tomorrow's debt

cnbc.com

March 9, 2026

2 min read

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66/100

Summary

Oracle's data centers are being built with outdated technology, while advancements in AI chips are outpacing construction timelines. OpenAI has decided not to expand its partnership with Oracle in Abilene, Texas, due to a preference for newer Nvidia graphics processing units.

Key Takeaways

Oracle is facing challenges in its data center expansion due to the rapid advancement of AI chips, which are outpacing the construction of new facilities.
OpenAI has decided not to expand its partnership with Oracle in Abilene, Texas, due to a preference for newer Nvidia graphics processing units.
Oracle is funding its buildout primarily with debt, amounting to $100 billion, while competitors like Google, Amazon, and Microsoft are using cash from their existing businesses.
The depreciation of GPUs poses a risk to the broader AI market, as infrastructure deals may commit companies to outdated hardware before facilities are operational.

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Community Sentiment

Mixed

Positives

Oracle's access to Nvidia's roadmap suggests they may adapt their data centers to future technologies, potentially enhancing performance and efficiency.
The ongoing development of Blackwell data centers indicates that Oracle is not entirely out of touch with current advancements in AI hardware.

Concerns

Oracle's strategy of building today's data centers for tomorrow raises concerns about their competitiveness, especially as newer, more efficient chips like Vera Rubin are on the horizon.
There is skepticism about Oracle's ability to price Blackwell data centers competitively, given the expected 5x efficiency gains of upcoming models.