Oracle Cloud Embraces 50,000 AMD GPUs, Challenging Nvidia's AI Dominance

Oracle Cloud Infrastructure announces it will deploy 50,000 Advanced Micro Devices (AMD) graphics processors starting in the second half of 2026, signaling a significant shift in the AI chip market. The move aims to offer customers an alternative to Nvidia's dominant GPUs, which currently hold over 90% of the data center GPU market.

AMD's New Chips and Oracle's Strategy

Oracle plans to use AMD's Instinct MI450 chips, which are designed to be assembled into larger, rack-sized systems. These systems enable 72 chips to work as one, providing the necessary power for advanced AI algorithms. Karan Batta, senior vice president of Oracle Cloud Infrastructure, expresses confidence in the adoption of AMD chips, particularly in the inferencing space.

Market Reaction and OpenAI's Involvement

Following the announcement, AMD shares rise by about 2%, while Oracle and Nvidia shares experience declines. This deployment aligns with OpenAI's recent deal with AMD, which includes a multi-year commitment for processors requiring 6 gigawatts of power. If successful, OpenAI may acquire up to 10% of AMD's shares. OpenAI also has a five-year cloud deal with Oracle, potentially worth $300 billion.

Industry Context and Implications

The move by Oracle underscores the growing trend among cloud companies to diversify their AI chip suppliers. While Nvidia remains the leader, the demand for more computing power is driving the need for multiple sources. OpenAI, historically reliant on Nvidia, is now exploring partnerships with other suppliers, including designing its own AI chips with Broadcom.

Expert Insights

Daniel Newman, CEO of The Futurum Group, notes that Oracle must now demonstrate it can leverage its massive data and enterprise capabilities to add value to the AI wave. Larry Ellison, Oracle's founder and chairman, is set to share his views on the latest developments at Oracle AI World, highlighting the company's strategic moves to stay competitive in the cloud market.

References

• Oracle Cloud to deploy 50,000 AMD AI chips, signaling new Nvidia competition