OpenAI & Oracle Strike $300B “Project Stargate” Cloud Deal
▼ Summary
– OpenAI and Oracle signed a $300 billion cloud computing deal over five years, one of the largest such agreements ever.
– The companies previously announced a partnership to build data centers with 4.5 gigawatts of power as part of the Stargate project.
– OpenAI’s contract with Oracle is set to begin in 2027, according to the report.
– OpenAI is also reportedly behind a $10 billion contract with Broadcom to design its own AI chip.
– Oracle announced three unnamed companies signed four multi-billion-dollar contracts in Q1, contributing to a 77% increase in cloud revenue.
A monumental partnership between OpenAI and Oracle is set to reshape the landscape of artificial intelligence infrastructure, with a staggering $300 billion cloud computing agreement spanning the next five years. This colossal investment, one of the largest of its kind, underscores the escalating demand for computational power driven by rapid advancements in AI.
The collaboration, known internally as “Project Stargate,” builds upon a previously announced joint effort with SoftBank and former President Trump to construct data centers capable of generating 4.5 gigawatts of power. While initial announcements did not disclose financial terms, the newly revealed contract value highlights the sheer scale of computational resources required to support next-generation AI models.
OpenAI’s commitment to this partnership begins in 2027, aligning with its aggressive growth trajectory. The organization is projected to achieve $12.7 billion in revenue this year, reflecting its dominant position in the AI sector. In a parallel move aimed at securing specialized hardware, OpenAI is also reportedly negotiating a separate $10 billion contract with Broadcom to develop custom AI chips.
Oracle’s cloud division is experiencing explosive growth, fueled by a series of high-value agreements. During a recent earnings call, CEO Safra Catz revealed that three undisclosed companies signed four separate multi-billion-dollar contracts in the first quarter alone. This surge in demand has propelled Oracle’s cloud infrastructure revenue by an impressive 77 percent year-over-year.
The company’s future contract revenue swelled by over $317 billion in Q1, a financial milestone that not only boosted shareholder confidence but also elevated Chairman Larry Ellison to the position of the world’s wealthiest individual. This deal with OpenAI represents a critical component of Oracle’s strategy to compete with other cloud giants while supporting the most ambitious AI initiatives on the planet.
(Source: The Verge)
