OpenAI has reportedly entered into one of the largest cloud computing agreements ever, committing to purchase around US$300 billion worth of computing power from Oracle over the course of five years. The news, first reported by the Wall Street Journal, highlights the growing demand for large-scale cloud infrastructure to support artificial intelligence development.
Details of the reported agreement
The deal is linked to Project Stargate, a large-scale data centre initiative announced in July by Oracle, OpenAI, SoftBank, and former US President Donald Trump. At the time, the companies revealed plans to build facilities capable of generating 4.5 gigawatts of power, though OpenAI did not disclose the size of its financial commitment. According to the Wall Street Journal, the contract with Oracle will begin in 2027.
OpenAI is forecast to generate US$12.7 billion in revenue this year. Alongside the Oracle arrangement, the company is also believed to be behind a separate US$10 billion deal with Broadcom to design a proprietary AI chip, further signalling its push to secure advanced hardware and computing resources.
Oracle’s financial performance
Oracle reported its quarterly earnings on Tuesday, where Chief Executive Safra Catz disclosed that three unnamed companies had signed “four multi-billion-dollar contracts” during the first quarter. While she did not confirm the identity of the clients, analysts and industry watchers have pointed to OpenAI as one of the key players behind these significant deals.
Catz highlighted the momentum of Oracle’s cloud infrastructure business, stating that revenue in this segment has risen by 77 per cent over the past year. The company said it had added more than US$317 billion in future contract revenue during Q1, a figure that contributed to a sharp rise in its share price.
Market impact and leadership shifts
The scale of these contracts has had a direct impact on Oracle’s market performance. Following the announcement, the company’s stock value climbed significantly, propelling its chairman, Larry Ellison, to the position of the world’s richest person.
Industry experts suggest that partnerships such as the one reportedly agreed with OpenAI demonstrate the increasing centrality of cloud infrastructure providers in the global AI race. With demand for computing power accelerating, such long-term commitments are seen as crucial for both technology companies and their suppliers.
As the Stargate project develops, the deal underscores the growing interdependence between AI developers, chipmakers, and cloud providers, setting the stage for further competition and collaboration across the industry.
