On July 2, 2025, OpenAI reportedly signed a massive $30 billion-per-year cloud and data centre agreement with Oracle, part of its “Stargate” infrastructure initiative. This stands as one of the largest-ever contracts in AI cloud computing, aiming to lease around 4.5 GW of power capacity across U.S. data centres
🔍 What the Deal Covers
- Annual Lease: $30 billion per year, starting in fiscal 2028, to rent 4.5 gigawatts of compute power from Oracle’s data centres.
- Data Centre Sites: Oracle will build or expand facilities in multiple U.S. states—Texas (including Abilene), Michigan, Wisconsin, Georgia, New Mexico, Ohio, and Pennsylvania.
- Stargate Expansion: This aligns with the $500 billion “Stargate” AI infrastructure project, launched in early 2025 with partners SoftBank, Oracle, MGX, and OpenAI.
📈 Why It Matters
| Impact Area | Why It’s Important |
|---|---|
| Oracle Gains: | Cloud revenue could nearly triple—from $10.3 B to $30 B annually—pushing Oracle into the top cloud provider league. Shares jumped to record highs. ft.com+10ft.com+10ft.com+10 |
| OpenAI Diversifies: | Less reliance on Microsoft Azure, while leveraging Oracle alongside Google, CoreWeave, and its own centres. |
| AI Infrastructure War: | Oracle positions itself to challenge AWS and Azure in next-gen AI infrastructure. Competitors face shortages in high-capacity compute. |
💬 Leadership Insights
- Larry Ellison, Oracle’s founder, pledged heavy investment: $25 billion CapEx, $40 billion in Nvidia chips, and intent to outbuild all competitors combined. economictimes
- OpenAI CEO Sam Altman emphasized broadening compute sources to keep pace with AI model demand.
🔮 What’s Next?
- Oracle builds fast: Expect multiple U.S. AI data centres, starting with upgrades in Abilene and expansions elsewhere.
- Compute chip rollout: Plans include deploying hundreds of thousands of Nvidia GB200 chips.
- Revenue on horizon: The deal revenues kick off in fiscal 2028; execution will define Oracle’s place in the cloud hierarchy and test U.S. energy and infrastructure alignment.
✅ Conclusion
The OpenAI data centre deal with Oracle signifies a tectonic shift in AI infrastructure. A $30 B per year pact is a major diversification move for OpenAI beyond Microsoft Azure and fuels Oracle’s ambition to become a leading AI cloud provider.
