United States of America

OpenAI Signs $30B Oracle Cloud Deal for AI Infrastructure

Published JUL 3 2025

Story

Above: The Oracle offices in Redwood City, California, on June 2, 2025. Image credit: David Paul Morris/Bloomberg/Getty Images

The Facts

OpenAI has agreed to lease approximately 4.5 gigawatts of computing power from Oracle Corp. as part of the Stargate initiative, in one of the largest cloud agreements for artificial intelligence to date.
www.ft.com
Bloomberg.com
Due to start in fiscal year 2028, the deal is valued at approximately $30 billion annually, amounting to nearly triple Oracle’s current $10.3 billion annual revenue from its data center infrastructure business in 2025.
Verdict
www.ft.com
Oracle will develop multiple data centers across the United States to meet OpenAI’s requirements, with potential locations including Texas, Michigan, Wisconsin, Wyoming, New Mexico, Georgia, Ohio, and Pennsylvania.
Techzine Global
Bloomberg.com
The existing Stargate facility in Abilene, Texas, will also be expanded from 1.2 gigawatts to approximately 2 gigawatts, with Oracle planning to purchase around 400,000 Nvidia GB200 chips for $40 billion.
Techzine Global
www.ft.com
Techinasia
Oracle originally announced the deal in a Securities and Exchange Commission filing on Monday, but left the client unnamed. The filing also stated that the company’s MultiCloud database revenue growth is exceeding 100% in the 2025-26 financial year.
SEC
Oracle shares jumped to record highs following the announcement, with stock gaining as much as 5% and rising roughly 34% year-to-date on Monday, as investors showed enthusiasm for the company’s cloud business expansion.
CNBC
Investors

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Optimist narrative

The deal with OpenAI proves that Oracle is successfully positioning itself as a major player in the AI infrastructure race. With its MultiCloud database revenues already growing by over 100% this financial year, the annual injection of an additional $30 billion in capital will enable the company to cement its position as the world’s leading builder and operator of cloud infrastructure data centers.

SEC

Cynical narrative

Oracle’s deal with OpenAI is a massive gamble. Since OpenAI’s payments will not kick in until 2028, Oracle will have to pay upfront for data centers and server upgrades on its own, a task made difficult by its large capital expenditures and strained cash flow. Oracle faces the risk that it cannot execute its part of the deal before its balance sheet is overwhelmed by the costs.