OpenAI has struck one of the largest cloud computing deals in history with Oracle, agreeing to a contract worth about $300 billion over five years starting in 2027.
According to the Wall Street Journal, the agreement will see Oracle supply OpenAI with roughly 4.5 gigawatts of computing capacity, an amount of power comparable to two Hoover Dams or enough to run around four million homes.
The scale of the deal is staggering compared to OpenAI’s current business. The AI company generates around $10 billion in annual revenue, making the long-term commitment a major financial bet on the future of its technology.
For Oracle, the agreement represents a transformative moment. Shares of the company surged by nearly 43% following the announcement, the biggest single-day gain since 1992. The stock jump added more than $100 billion to Chairman Larry Ellison’s wealth, briefly pushing him past Elon Musk and Jeff Bezos in global rich lists.
Still, both sides face significant risks. For OpenAI, the multi-hundred-billion-dollar commitment locks the company into massive infrastructure spending far outpacing its current revenues.
For Oracle, delivering on such a colossal supply of cloud and AI infrastructure may require heavy investment and debt financing, while tying its fortunes closely to one customer.
The deal also carries major strategic implications. OpenAI has long relied on Microsoft’s Azure cloud, but working with Oracle shows it is diversifying its computing needs.
The partnership also ties into “Stargate,” a massive AI infrastructure project backed by Oracle, SoftBank and others, aimed at powering the next generation of large-scale AI systems.
Ultimately, the agreement highlights how the race to lead in AI is now driven by huge bets on infrastructure. For Oracle, the win boosts its position against Microsoft, Amazon and Google in the cloud market.
