Oracle Secures Massive $30 Billion Cloud Deal with OpenAI for Project Stargate

Reviewed byNidhi Govil

9 Sources

Oracle has landed a groundbreaking $30 billion annual cloud deal, likely with OpenAI, to support the ambitious Project Stargate. This partnership aims to dramatically expand AI infrastructure across the United States.

Oracle's Landmark $30 Billion Cloud Deal

Oracle has secured a monumental cloud computing contract, expected to generate more than $30 billion in annual revenue starting in fiscal year 2028 1. This deal, which nearly triples Oracle's current cloud infrastructure business, is believed to be with OpenAI for its ambitious Project Stargate initiative 3.

Source: TechSpot

Source: TechSpot

Project Stargate: A $500 Billion AI Infrastructure Initiative

Project Stargate, announced in January 2025, is a joint venture between OpenAI, SoftBank, Oracle, and Abu Dhabi sovereign fund MGX. The project aims to invest up to $500 billion over four years to build advanced AI data centers across the United States 3. This massive undertaking is designed to secure American leadership in AI and support the re-industrialization of the country 5.

The Scale of the Deal

Under this agreement, OpenAI will lease approximately 4.5 gigawatts of computing power from Oracle, equivalent to about a quarter of the US's current operational data center capacity 3. Oracle plans to develop multiple data centers across several states, including Texas, Michigan, Wisconsin, and Wyoming, with potential expansions to New Mexico, Georgia, Ohio, and Pennsylvania 3.

Oracle's Strategic Position in the AI Cloud Market

This deal marks a significant milestone for Oracle, which was initially slow to enter the cloud computing market. The company has experienced a sharp increase in demand for data center infrastructure, with its cloud business growing 52% in the most recent quarter 2. Oracle has positioned itself as a key player in the AI infrastructure space, benefiting from capacity constraints at rivals like Microsoft 2.

Source: SiliconANGLE

Source: SiliconANGLE

Technical Specifications and Investments

To power the Stargate project, Oracle is reportedly planning to purchase around 400,000 of Nvidia's high-performance GB200 chips for approximately $40 billion 3. The company has also pledged to invest $7 billion in the Stargate joint venture and plans to spend $25 billion in capital expenditure next year 3.

Market Impact and Future Outlook

The announcement of this deal sent Oracle's shares soaring to a record high, with the stock price rising by about one-third year-to-date 2. Oracle CEO Safra Catz expressed optimism about the company's future, stating that fiscal year 2026 is expected to see dramatically higher revenue growth rates 5.

Implications for the AI and Cloud Computing Landscape

Source: Benzinga

Source: Benzinga

This landmark deal signifies a shift in the cloud industry, where the race to provide infrastructure for artificial intelligence is driving unprecedented investment and competition. It also highlights OpenAI's strategy to diversify its cloud providers beyond its primary partner, Microsoft 3.

As the AI industry continues to grow rapidly, deals of this magnitude are likely to become more common. Oracle co-founder Larry Ellison has stated that the company has entered a new era where billion-dollar deals are becoming routine, emphasizing Oracle's commitment to being a leading provider of cloud infrastructure for AI applications 4.

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