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OpenAI and Oracle Ink $300B Cloud Deal to Accelerate AI Growth

OpenAI to buy $300B in computing infrastructure from Oracle over five years under its Project Stargate data center initiative.

OpenAI announced that it has entered into an agreement to purchase $300 billion worth of computing infrastructure from Oracle Corp. over the next five years, as part of its previously revealed Project Stargate data center initiative.

This marks one of the largest cloud contracts ever signed, representing a significant commitment that exceeds OpenAI’s current revenue. The deal highlights the rapidly accelerating investment in AI data centers by major Silicon Valley firms.

OpenAI and Oracle will build 4.5 gigawatts of data center capacity, comparable to the output of more than two Hoover Dams, or the power usage of about 4 million U.S. homes.

The news follows a 42% surge in Oracle’s stock recently, after it reported securing $317 billion in future contract revenue last quarter. On an analyst call, Oracle CEO Safra Catz revealed the company had signed deals with three major customers, one of them now confirmed as OpenAI.

The first indication of the deal surfaced in June, when Oracle disclosed in a regulatory filing that it had signed a cloud services agreement expected to generate over $30 billion in revenue for fiscal 2027.

The revenue is projected to grow annually as additional data center infrastructure becomes operational. A month later, OpenAI announced it would acquire 4.5 gigawatts of compute capacity from Oracle, though it did not reveal the contract’s total value at that time.

At the launch of Stargate, the partners committed to building at least $100 billion in data centers, later expanding that target to $500 billion in the coming years.

OpenAI has since clarified that Stargate serves as the brand for all of its data center infrastructure projects, though it has not disclosed full details of the agreement, which also includes SoftBank Group Corp.

Following the announcement, OpenAI said it had already secured funding for more than half of the $500 billion goal, with construction already in progress in Abilene, Texas.

They are not alone in this race. Amazon Web Services, Microsoft, Google, and Meta have also pledged to invest a combined $300 billion this year to rapidly expand their own massive AI data centers.