Nvidia's stock has experienced a remarkable surge this year, driven by investor optimism in its role as a key player in the artificial intelligence revolution. Elon Musk is counted among those who are particularly enthusiastic about the semiconductor company's products, according to comments made by Oracle's Larry Ellison on Monday.
Despite Musk choosing Oracle's servers for running the chatbot Grok for his xAI company, the demand for Nvidia chips outstripped Oracle's supply capabilities. Ellison revealed during Oracle's recent earnings call that Musk's team wanted a substantial increase in the number of GPUs (graphics processing units) provided. Although Oracle supplied a considerable amount, Musk's demand exceeded their initial allocation, and efforts are underway to fulfill the additional requirements.
During the call, Ellison highlighted the growing demand for large language models, citing it as a "gold rush" in the industry. He assured that Oracle is committed to meeting their customers' needs by gradually increasing capacity in successive quarters.
In response to a question about Oracle's plans to build more cloud data centers, Ellison emphasized the need for expansion to keep up with demand. He referenced the example of Microsoft ordering 20 new data centers for its Azure platform and stated Oracle's intention to build more to cater to the rising demand from its direct customers.
Oracle CEO Safra Catz echoed Ellison's sentiments, emphasizing the company's strategic decision to hold back in the previous quarter to focus on building larger-scale services for the future. Both executives emphasized the importance of expanding capacity to meet the growing demand for cloud services.
Elon Musk's consistent procurement of Nvidia chips for his various companies, including the recent purchase of 10,000 graphics processors for xAI, underscores the intense demand for graphics chips. Ellison's comments suggest that the appetite for these chips remains strong, providing positive indications for Nvidia investors.
-------The article excerpted from Bloomberg.