<\/p>\n
Investor Michael Burry has claimed that OpenAI backed out of a major data centre arrangement with Oracle because it preferred a different generation of chips from Nvidia<\/a>.<\/p>\n<\/div>\n According to Burry, the disagreement centred on whether the facility would be built around Nvidia\u2019s Rubin architecture or its Blackwell platform, which require different types of data centre infrastructure.<\/p>\n<\/div>\n \u201cThe nut of it is that OpenAI<\/a> bowed out of the Oracle deal because it wanted NVDA Rubin and not the Blackwell, which are two different types of data center builds,\u201d Burry wrote.<\/p>\n<\/div>\n He added that Oracle had already committed heavily to the project\u2019s existing configuration.<\/p>\n<\/div>\n \u201cOracle borrowed heavily to secure the site and order all the hardware for the buildout around Blackwell,\u201d he said.<\/p>\n<\/div>\n Burry said OpenAI ultimately concluded that the technology planned for the facility could become outdated before construction was completed.<\/p>\n<\/div>\n \u201cOpenAI as the customer said the chips will be dated before the building is even ready,\u201d he said.<\/p>\n<\/div>\n The comments come amid an intense race among technology companies to build large-scale artificial intelligence data centres, which rely on cutting-edge graphics processing units (GPUs) to run AI models.<\/p>\n<\/div>\n Burry also alleged that Nvidia intervened to ensure its chips remained the preferred choice for the project and to prevent rival suppliers from winning the contract.<\/p>\n<\/div>\n \u201cThen Nvidia got involved and paid $150 million to block AMD from getting the Oracle build contract,\u201d Burry claimed.<\/p>\n<\/div>\n \u201cThis is how NVDA throws its weight around to block AMD use by its customers. It is mafia-like and should be an antitrust case.\u201d<\/p>\n<\/div>\n The claim refers to competition between Nvidia and rival chipmaker Advanced Micro Devices for dominance in the rapidly expanding AI hardware market.<\/p>\n<\/div>\n Burry also suggested that US regulators have been examining Nvidia\u2019s business practices.<\/p>\n<\/div>\n \u201cThe Justice Dept has been investigating NVDA for almost two years,\u201d he said, referring to the United States Department of Justice.<\/p>\n<\/div>\n However, he added that he doubts the department would pursue a case under the administration of Donald Trump.<\/p>\n<\/div>\n \u201cI don\u2019t think Trump\u2019s DOJ will prosecute NVDA,\u201d Burry said.<\/p>\n<\/div>\n Despite the dispute, Burry noted that Oracle and OpenAI remain partners on other projects.<\/p>\n<\/div>\n He also said that Meta Platforms had stepped in to take over the data centre development that OpenAI abandoned.<\/p>\n<\/div>\n Oracle and OpenAI have abandoned plans to expand a flagship AI data centre in Abilene after talks stalled over financing and changing requirements, according to a Bloomberg News report.<\/p>\n<\/div>\n The proposed expansion was part of the Stargate AI infrastructure initiative<\/a>, a project worth up to $500 billion<\/a> and 10 gigawatts, backed by SoftBank Group, Oracle and OpenAI and announced by Donald Trump in January 2025.<\/p>\n<\/div>\n Despite the decision to drop a planned 600-megawatt expansion near the Abilene site, Oracle and OpenAI\u2019s broader plan to develop 4.5 gigawatts of data centre capacity remains on track, Reuters said citing a source. The move has opened the door for Meta Platforms to consider leasing the expansion site from developer Crusoe Energy Systems.<\/p>\n<\/div>\nConcerns about chip obsolescence<\/h2>\n
Allegations over Nvidia\u2019s market influence<\/h2>\n
Calls for antitrust scrutiny<\/h2>\n
AI infrastructure race intensifies<\/h2>\n
Oracle, OpenAI abandon Texas AI data centre expansion tied to $500 billion Stargate project: Report<\/h2>\n