Oracle Founder Larry Ellison Just Delivered Fantastic News for Nvidia Stock Investors

Larry Ellison owns 42% of Oracle (NYSE: ORCL), a $465 billion technology giant that is building some of the most powerful data centers for artificial intelligence (AI) development.

Nvidia (NASDAQ: NVDA) supplies Oracle and most other tech companies with data center chips called graphics processing units (GPUs). Nvidia has experienced an eye-popping surge in its revenue over the past year, and GPU demand continues to outstrip supply. However, some investors have begun to question how much longer Oracle and its peers can throw billions of dollars at the chip giant to fuel their AI aspirations.

Worries that the AI train may be starting to lose steam are a key reason Nvidia stock is trading down 14.5% from its all-time high. But the market may have missed comments this month from Ellison at Oracle's financial analyst meeting that suggest more fantastic news for Nvidia's investors.

Oracle is nowhere close to meeting its AI infrastructure goals

Oracle's data centers are unique because they are automated. Each one is operationally identical regardless of its size, and since they don't require human workers, it allows the company to build them quickly. Plus, Oracle's RDMA (random direct memory access) GPU networking technology allows data to flow from one point to another more quickly than traditional Ethernet networks.

Since most AI developers pay for computing capacity by the minute, Oracle's data centers can deliver considerable cost savings compared to competing infrastructure. That's why demand is soaring from leading AI start-ups like OpenAI, Cohere, and xAI. Oracle had 85 data centers up and running with 77 more under construction as of its fiscal 2025 first quarter (ended Aug. 31), but Ellison thinks it could operate as many as 2,000 in the long term.

Next year, Oracle intends to offer a cluster of 131,072 GPUs, which is a big step up from its largest clusters now, at around 32,000 GPUs. But there's another difference: The new cluster will use Nvidia's latest Blackwell chips, which can perform AI inference at 30 times the pace of its flagship H100, which Oracle currently uses. Theoretically, it's going to allow developers to build the largest AI models in history.

That's going to benefit Nvidia significantly. It generated $26.3 billion in data center revenue during its fiscal 2025 second quarter (ended July 28) primarily from GPU sales, which was a 154% increase from the year-ago period. That growth rate slowed compared to previous quarters because the numbers have become so large, but Nvidia's customers are showing no signs of pulling back.