OpenAI has signed a landmark agreement with Oracle to purchase $300 billion in cloud computing power over five years, according to the Wall Street Journal. The contract, part of the company’s broader Project Stargate initiative with Softbank and former President Trump, will begin in 2027. The scale of the deal makes it one of the largest cloud computing contracts in history.
In July, OpenAI and Oracle announced plans to build massive data centers with 4.5 gigawatts of capacity, though the financial scope of OpenAI’s involvement was unclear until now. The partnership underscores OpenAI’s growing need for infrastructure as it expands its AI offerings and prepares for greater demand.
OpenAI, which expects to generate $12.7 billion in revenue this year, is also reportedly backing a $10 billion agreement with Broadcom to design custom AI chips. These efforts highlight the company’s strategy to secure both computing power and hardware as competition in AI infrastructure intensifies.
Oracle confirmed the existence of several large new contracts in its latest earnings call. CEO Safra Catz announced that three unnamed companies had signed four multi-billion-dollar agreements in Q1, contributing to a 77 percent jump in Oracle’s cloud infrastructure revenue. The company revealed it had added more than $317 billion in future contract revenue during the quarter.
The news sent Oracle’s share price soaring and vaulted chairman Larry Ellison into the position of the world’s richest person. Analysts view the OpenAI contract as a critical validation of Oracle’s cloud strategy, which has long trailed rivals Amazon Web Services and Microsoft Azure.
For OpenAI, the deal marks a decisive step in building the infrastructure necessary to support advanced models and future AI products. The company has faced mounting costs as it scales, with industry reports suggesting long-term expenses could reach hundreds of billions of dollars. By aligning with Oracle and Broadcom, OpenAI appears to be diversifying its technology partners and spreading risk while ensuring it has the computing power needed to compete in the rapidly escalating AI race.
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