Oracle and Meta in Talks for Massive $20 Billion AI Cloud Computing Deal

Oracle in Talks With Meta on $20 Billion AI Cloud Computing Deal

Oracle Corp. is in discussions with Meta Platforms Inc. for a cloud computing deal worth about $20 billion, providing further evidence that the company has become a significant infrastructure provider. Under the multiyear deal, Oracle would provide the social media giant with computing power for training and deploying artificial intelligence models, according to people familiar with the talks. The total commitment amount may increase and other deal terms could still change before a final agreement, said the people, who asked not to be named because the discussions were private.

Oracle in talks with Meta on $20 billion AI cloud computing deal, Bloomberg News reports

Sept 19 (Reuters) - Oracle (ORCL.N), opens new tab is in talks with Meta (META.O), opens new tab for a multi-year cloud computing deal worth nearly $20 billion, Bloomberg News reported on Friday, citing people with knowledge of the matter. Oracle would provide the social media giant with computing power for training and deploying AI models, the report said, adding that the total deal amount may rise and the terms could still change. Both Meta and Oracle did not immediately respond to Reuters' requests for comment. Reporting by Juby Babu in Mexico City; Editing by Mohammed Safi Shamsi and Shinjini Ganguli Our Standards: The Thomson Reuters Trust Principles., opens new tab

Oracle could hit again: Meta talks could lead to $20 billion AI cloud deal

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. Rumor mill: The potential accord with Meta highlights how intensely companies are competing to lock in the resources needed for AI development. As workloads for advanced models increase in complexity and cost, cloud providers capable of delivering the necessary scale have become pivotal in determining which firms can stay competitive in the race to commercialize AI technologies. Oracle is negotiating a multiyear agreement with Meta that could be valued at roughly $20 billion, people familiar with the matter have told Bloomberg. The arrangement would make Oracle a key provider of computing power for Meta's artificial intelligence operations. The agreement, which has not yet been finalized, would involve Oracle supplying large-scale computing capacity to support the training and deployment of Meta's AI models. The talks remain private and details of the financial commitment could still change, the people said. If completed, the deal would add to Oracle's recent streak of substantial bookings from companies looking to secure advanced AI infrastructure. The discussions come on the heels of Oracle reporting a surge in cloud contracts earlier this month, a wave that boosted the company's shares to record levels. That growth has been tied closely to AI-driven demand for compute power, a segment where Oracle has positioned itself alongside - and now increasingly against - entrenched leaders Amazon Web Services, Microsoft Azure, and Google Cloud. Until recently, Oracle was known primarily for enterprise database software, but its cloud division has become central to technology companies investing heavily in generative AI. Meta is already a customer of Oracle, which also provides infrastructure to the likes of Elon Musk's xAI. The potential $20 billion commitment would extend that relationship at a time when the social media company has been expanding investments into large-scale AI models to power both its consumer platforms and research efforts. Meta declined to comment on the negotiations, while Oracle did not respond to requests for comment. The deal talks also add to mounting interest among investors in the concentration of Oracle's newest business lines. Analysts have raised questions over how much of the company's cloud bookings rely on single clients, pointing to a separate landmark agreement inked earlier this year with OpenAI. That $300 billion deal, estimated to provide 4.5 gigawatts of computing power to the ChatGPT-maker, has been described as one of the largest cloud infrastructure contracts to date. Last week, Oracle said it had secured four additional multibillion-dollar deals and projected that its cloud unit's revenue would surpass $500 billion. The company disclosed that revenue from cross-cloud service partnerships with Amazon, Microsoft and Google rose more than sixteenfold in its most recent quarter.

Oracle shares climb on reports it could ink $20B cloud deal with Meta - SiliconANGLE

Oracle shares climb on reports it could ink $20B cloud deal with Meta Shares of Oracle Corp. closed 4% higher today following reports that it's negotiating a $20 billion deal to provide Meta Platforms Inc. with cloud infrastructure. Sources told Reuters that the Facebook parent would use the hardware for artificial intelligence training and inference. Separately, Bloomberg reported that the value of the deal could exceed $20 billion. It's believed other terms may change as well before the contract is finalized. The reports come two months after Oracle inked an agreement to build 4.5 gigawatts' worth of data center capacity for OpenAI. One gigawatt corresponds to the power usage of several hundred thousand homes. Shortly after the companies announced their partnership, sources told the Wall Street Journal that the project will be worth $300 billion over five years. AI infrastructure demand from OpenAI, Meta and other customers has buoyed Oracle's stock, which is up more than 80% this year. Much of that gain materialized after the company's earnings report last week. Oracle disclosed that its total remaining performance obligations, a measure of future sales, jumped 359% year-over-year to $455 billion. The database maker is investing heavily in new infrastructure to meet user demand. Oracle expects to increase its capital expenditures by 65% during the current fiscal year to $35 billion. The company's cloud platform, OCI, offers access to AI clusters with upwards of 100,000 Nvidia Corp. graphics processing units. The clusters also include the chipmaker's switches and SHARP technology. SHARP reduces the amount of data that GPUs must exchange over the network to coordinate their work, which leaves more bandwidth for other workloads. Meta may commission AI clusters with a different architecture if it finalizes its $20 billion cloud contract with Oracle. In particular, the Facebook parent might seek to replace some Nvidia products with its internally-developed silicon. In March, sources told Reuters that Meta had begun testing its first custom AI training chip. Earlier, the company detailed an accelerator called MTIA that is optimized for inference workloads. It's believed Meta will initially use the chips to power recommendation algorithms. OpenAI may take a similar approach in its partnership with Oracle. According to the Financial Times, the ChatGPT developer will start mass producing a custom AI accelerator that it has developed in collaboration with Broadcom Inc. next year. OpenAI has stated that the 4.5 gigawatts' worth of infrastructure it's commissioning from Oracle will include more than two million chips. Meta's cloud deal with Oracle, meanwhile, is likely part of the broad data center initiative it detailed in July. The project will see the Facebook parent invest hundreds of billions of dollars in new AI infrastructure. The first two data center clusters it plans to build, Prometheus and Hyperion, will each require several gigawatts of electricity.

Oracle in talks with Meta on $20 billion AI cloud computing deal, Bloomberg News reports

(Reuters) -Oracle is in talks with Meta for a multi-year cloud computing deal worth nearly $20 billion, Bloomberg News reported on Friday, citing people with knowledge of the matter. Oracle would provide the social media giant with computing power for training and deploying AI models, the report said, adding that the total deal amount may rise and the terms could still change. Both Meta and Oracle did not immediately respond to Reuters' requests for comment. The potential deal comes just a week after a Wall Street Journal report on OpenAI signing a contract to purchase $300 billion in computing power over roughly five years from Oracle, marking one of the biggest cloud contracts ever signed. Oracle unveiled four multi-billion-dollar contracts last week, amid an industry-wide shift, led by companies such as OpenAI and xAI, to aggressively spend to secure the massive computing capacity needed to stay ahead in the AI race. The enterprise software maker said it expects to sign up several additional multi-billion-dollar customers in the next few months, and that booked revenue at its Oracle Cloud Infrastructure business would exceed half a trillion dollars. (Reporting by Juby Babu in Mexico City; Editing by Mohammed Safi Shamsi and Shinjini Ganguli)