OpenAI has confirmed it is the customer behind Oracle’s $30 billion-a-year cloud deal. This partnership is set to supercharge the infrastructure behind OpenAI’s artificial intelligence services, and marks one of the most expensive cloud contracts in tech history.
Key Highlights
- OpenAI confirms deal with Oracle for data center capacity.
- Annual value of the contract: $30 billion, though OpenAI didn’t confirm the exact number.
- The deal is part of the massive Stargate project, aimed at building AI supercomputing hubs.
- 4.5 gigawatts of power will be used — equivalent to two Hoover Dams.
- New data center will be located at Stargate I site in Abilene, Texas.
- Oracle’s stock soared after the SEC filing that hinted at the deal.
- OpenAI’s own revenue is $10 billion per year — far less than the value of this contract.
OpenAI and Oracle Join Forces for AI Expansion
In a deal that stunned the tech world, OpenAI has confirmed it is the buyer behind Oracle’s massive $30 billion-per-year cloud services contract. The news first surfaced when Oracle disclosed the revenue figure in a June 30 SEC filing but didn’t name the customer.
Speculation followed as industry watchers tried to guess who could possibly need that much cloud power. Now, OpenAI CEO Sam Altman has confirmed it in a recent X (formerly Twitter) post and a company blog update, though he didn’t mention the dollar amount.
What Is the Deal For?
This isn’t just about storing data. The deal is focused on powering the next generation of AI systems. OpenAI will be tapping into Oracle’s cloud infrastructure to build and run large-scale artificial intelligence models.
Here’s what’s involved:
- 4.5 gigawatts of data center capacity, which is:
- Enough to power about 4 million homes.
- The equivalent of two Hoover Dams.
- Part of the Stargate initiative, a $500 billion project involving OpenAI, Oracle, and SoftBank.
- The new data center will be built in Abilene, Texas — called the Stargate I site.
- SoftBank is not directly involved in this $30B deal, despite its role in Stargate.
Why This Matters
This move cements Oracle’s position as a major player in the cloud infrastructure race — alongside Amazon Web Services (AWS), Google Cloud, and Microsoft Azure.
For Oracle:
- The deal helped push its stock to an all-time high.
- CTO Larry Ellison became the second richest person in the world, per Bloomberg.
- Oracle spent $21.2 billion on capital projects last year and plans another $25 billion this year, much of it on data centers.
For OpenAI:
- This is a huge infrastructure bet.
- OpenAI recently hit $10 billion in annual recurring revenue — up from $5.5 billion last year.
- Yet this contract is triple its current yearly income, raising questions about long-term sustainability and funding.
What’s Next?
OpenAI and Oracle now face the challenge of actually building this massive data center infrastructure. It won’t be easy. It will take enormous financial, technical, and energy resources.
But if successful, this could lay the groundwork for some of the most advanced AI models ever created, possibly pushing OpenAI’s technology far beyond where it is today.
The partnership also aligns with OpenAI’s long-term vision: to develop artificial general intelligence (AGI) and scale it responsibly.
A Quick Look at the Numbers
| Item | Detail |
| Contract Value | $30 billion per year |
| Power Capacity | 4.5 gigawatts |
| Comparison | Equal to two Hoover Dams |
| OpenAI’s Revenue (2025) | $10 billion (recurring annually) |
| Oracle CapEx (FY2024 + FY2025) | $46.2 billion+ |
| Data Center Location | Abilene, Texas (Stargate I site) |
| Stargate Project Total Estimate | $500 billion |
Why Oracle?
Oracle has been aggressively growing its cloud business to compete with Amazon and Microsoft. This deal is a major win, showing confidence in Oracle’s capabilities to deliver on scale and speed.
The company is now building one of the largest data center footprints in the world, partly driven by OpenAI’s demand for computing power.
Final Thoughts
This deal represents a turning point in AI infrastructure. OpenAI is betting big on Oracle’s capacity to scale with its AI ambitions. The size of the contract — larger than OpenAI’s entire revenue — shows just how much computing power today’s AI needs.
It’s not just a win for Oracle, it’s a signal to the entire tech industry: AI is no longer a side project — it’s the main event.
external sources
https://www.ft.com/content/b4324903-ff53-48c2-bf71-4151cd4f68d0