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OpenAI has recently made a groundbreaking agreement with Oracle, leasing a massive 4.5 gigawatts of computing power in a deal worth approximately $30 billion annually. This deal is considered one of the largest cloud agreements to date for artificial intelligence.
The agreement signifies a significant expansion of OpenAI’s “Stargate” data center project, which was initially launched with SoftBank earlier this year. The purpose of this project is to access vast amounts of computing power to enhance their powerful AI models and fulfill the growing consumer demand for products like ChatGPT.
According to reports, Oracle will be developing multiple data centers across the United States to fulfill the requirements of the new Stargate contract. This roughly 4.5GW of computing power would be equivalent to about a quarter of the US’s current operational data center capacity.
The Stargate joint venture, which includes partners like SoftBank and Oracle, has pledged to invest as much as $500 billion to build data centers in the US and globally. The venture has already raised approximately $50 billion from its founding partners, including the Abu Dhabi sovereign fund MGX, with a significant portion yet to be deployed.
Oracle recently announced a single cloud computing contract worth $30 billion in annual revenue starting in 2028, without disclosing the customer’s identity. However, sources close to the matter confirmed that the customer behind this substantial contract was OpenAI as part of their Stargate expansion.
Potential locations for new data center sites include various states such as Texas, Michigan, Wisconsin, Wyoming, New Mexico, Georgia, Ohio, and Pennsylvania. Additionally, Oracle plans to expand a 1.2GW Stargate facility in Abilene, Texas, with the help of data center startup Crusoe.
The news of the agreement sent Oracle’s shares to a record high, showcasing the market’s positive response to the deal. This deal is nearly triple the $10.3 billion in annual revenue Oracle generated from its data center infrastructure business in 2025.
Oracle’s push into the cloud computing market has been driven by the increasing demand for data center infrastructure as companies require more computing power to run AI systems. The company aims to compete with industry giants like Amazon and Microsoft through its ambitious investment in cloud infrastructure data centers.
Larry Ellison, Oracle’s founder, has emphasized the company’s ability to secure large contracts and compete with hyperscalers. Oracle has pledged significant investments in the Stargate joint venture and plans to ramp up capital expenditure in the coming years.
The collaboration between Oracle and OpenAI also highlights how OpenAI is expanding its partnerships with cloud providers to meet the rising demand for its AI products. The renegotiation of commercial terms with Microsoft earlier this year allowed OpenAI to sign cloud deals with Google and CoreWeave, in addition to its existing partnership with Oracle.
Both OpenAI and Oracle have refrained from commenting on the deal, but the implications of this partnership are significant for the future of AI development and cloud computing infrastructure.
