OpenAI, Oracle Sign $300 Billion Five-Year Cloud Computing Deal

ABILENE, Texas, Sept. 11, 2025 — In one of the largest deals in history, OpenAI has signed a contract to purchase $300 billion in computing power over roughly five years from Oracle, media reports have said.

After Oracle reported that it had signed multiple multi-billion-dollar contracts with several customers, shares of the tech giant soared after markets closed on Wednesday.

Soon after the Oracle announcement, OpenAI’s name surfaced as one of its customers in the deal-making process.

Notably, Oracle signed a deal with OpenAI for the AI company to purchase $300 billion worth of compute power over a span of about five years, media reports said. OpenAI would start purchasing this compute in 2027. Once this deal goes through, it would be one of the largest cloud contracts ever signed.

Oracle has been a long-standing partner of OpenAI. OpenAI started tapping Oracle for compute in the summer of 2024. The AI giant has now further distanced itself from exclusively using Microsoft Azure as its only cloud provider, a shift that began in January.

This decision to move away from Microsoft was timed with OpenAI’s involvement in the Stargate Project, in which OpenAI, SoftBank, and Oracle have committed to investing $500 billion into domestic data center projects over the next four years.

OpenAI is clearly in need of as much compute as it can get. The company reportedly signed a cloud deal with Google, according to Reuters, this spring, despite the fact that the two companies are racing against each other for AI supremacy.

Know More About the Earlier OpenAI-Oracle Deal

Cloud Deal: In July, more clarity surfaced on the $30 billion-per-year deal signed between OpenAI and Oracle in June for data center services.

OpenAI CEO Sam Altman had issued a confirmation regarding the details of the contract in an X post and in a company blog post. However, at that point in time, Sam did not reveal the dollar amount concerning the contract.

To recollect, on June 30, Oracle made a disclosure in an SEC filing that it had signed a cloud deal with the ChatGPT maker that would generate $30 billion a year in revenue.

However, the tech giant kept the name of the partner with which it had struck the deal under wraps. Oracle has also remained silent on the kind of services for which the deal was meant.

As soon as the news of Oracle’s deal became public, it caused the company’s stock to hit an all-time high, making its founder and CTO, Larry Ellison, the second richest person in the world, according to Bloomberg.

Data Center Development: The guessing game regarding the identity of Oracle’s customer continued until the recent past, even as industry watchers were left puzzled about why the company could possibly need a fresh $30 billion a year in data center services.

For comparison, Oracle collectively sold $24.5 billion worth of cloud services in its fiscal 2025 to all customers combined, it reported in June.

Giving more clarity on the deal, OpenAI has now said in detail that this Oracle deal is for 4.5 gigawatts of capacity as part of Stargate, the $500 billion data-center-building project OpenAI, Oracle, and SoftBank announced in January. As reported by CNBC, the $30 billion deal does not involve SoftBank.

Is Developing a Data Center an Uphill Task?

The deal with OpenAI is no low-hanging fruit for Oracle, as both have a humongous task to build the mega data center, which will be a costly affair in terms of cash and energy. The tech firms are carrying out the project at a site that OpenAI has named Stargate I, located in Abilene, Texas.

Meanwhile, in terms of capital expenditures in its last fiscal year, Oracle spent $21.2 billion, CEO Safra Catz reported in June. The company expects to spend another $25 billion this year, she said.

The takeaway here is that nearly $50 billion was largely spent on data centers in two years, which excludes land purchases. To be more specific, that money also supports Oracle’s existing customers, in addition to OpenAI’s demands.

Interestingly, in June, Sam Altman, while discussing company earnings, said that OpenAI recently hit $10 billion in annual recurring revenue, up from around $5.5 billion last year. This single commitment to Oracle is already triple per year what it is currently bringing in and doesn’t include all of the company’s other expenses, including its current data center commitments.

The $300 billion deal gives OpenAI unprecedented computing power, dramatically expanding the capacity and reach of its cloud infrastructure.

Inputs from Saqib Malik

Editing by David Ryder