MENLO PARK: Oracle Corp (ORCL.N) is spending "billions" of dollars on chips from Nvidia Corp (NVDA.O) as it expands a cloud computing service targeting a new wave of artificial intelligence (AI) companies, Oracle founder and Chairman Larry Ellison said on Wednesday.

Oracle's cloud division is working to gain ground against larger rivals such as Amazon Web Services (AMZN.O) and Microsoft Corp (MSFT.O). To get an edge, Oracle has focused on building fast networks that can shuffle around the huge amount of data needed to create AI systems similar to ChatGPT.

Oracle is also buying huge numbers of graphics processing units (GPUs) designed to crunch that data for AI work.

Oracle is also spending "billions" of dollars on Nvidia chips but even more on central processor units (CPUs) from Ampere Computing, a chip startup it has invested in, and Advanced Micro Device Inc (AMD.O), Ellison said at an Ampere event.

"This year, Oracle will buy GPUs and CPUs from three companies," Ellison said. "We will buy GPUs from Nvidia, and we're buying billions of dollars of those. We will spend three times that on CPUs from Ampere and AMD. We still spend more money on conventional compute."

Oracle said last month it had struck a deal with Cohere, an AI startup founded by ex-Google engineers, under which Cohere will offer its AI software running on supercomputers inside Oracle's data centers with as many as 16,000 Nvidia chips each.

Other companies such as CoreWeave, which earlier this year raised a fresh $200 million of funding, are also targeting AI companies with cloud hardware that relies heavily on Nvidia chips.