OpenAI recently signed a massive deal with Oracle for data center services, valued at $30 billion per year, as was revealed last month. This information was first reported by The Wall Street Journal, and OpenAI CEO Sam Altman has since confirmed the details of the contract, though he did not disclose the exact dollar amount in his social media posts and company blog updates.
To provide some background, on June 30, Oracle filed a disclosure with the SEC revealing a cloud services contract projected to generate $30 billion annually in revenue. However, Oracle did not initially reveal the client or the specific nature of the services involved. Following this announcement, Oracle’s stock soared to an all-time high. This surge propelled Oracle founder and CTO Larry Ellison to become the second richest person in the world, according to Bloomberg.
Speculation ran rampant regarding who Oracle’s mysterious $30 billion-a-year customer could be, leading many to marvel at the scale of such a commitment for data center services. For context, Oracle reported $24.5 billion in total cloud services revenue for its entire fiscal year 2025, so this single contract dwarfs its previous total annual cloud sales.
OpenAI has now clarified that the enormous deal is linked to a project known as Stargate—a $500 billion data center initiative announced in January, jointly involving OpenAI, Oracle, and SoftBank. This particular contract with Oracle covers 4.5 gigawatts of computing capacity. To put that in perspective, 4.5 gigawatts is roughly equivalent to the electricity output of two Hoover Dams, enough to power about four million homes. Notably, this $30 billion agreement appears to involve Oracle and OpenAI exclusively, without involving SoftBank directly.
However, this is not a straightforward victory for Oracle. The project requires constructing an enormous and costly data center, which will demand significant financial investment and energy resources. The facility, called Stargate I, will be located in Abilene, Texas. Oracle’s CEO, Safra Catz, reported that the company spent $21.2 billion on capital expenditures during its last fiscal year and expects to invest another $25 billion in the current year, much of which will support data center expansion. In total, Oracle plans to invest nearly $50 billion over two years, primarily to enhance its data center infrastructure. It’s important to note that these investments not only serve OpenAI’s growing demands but also support Oracle’s existing customer base.
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Finally, it is interesting to highlight OpenAI’s rapid revenue growth. Just last month, Sam Altman announced that OpenAI had reached $10 billion in annual recurring revenue, a significant increase from about $5.5 billion the previous year. The single Oracle deal now represents nearly triple OpenAI’s current annual revenue, illustrating the scale of the company’s expanding data center and operational needs—expenses that go beyond this new contract and include other existing commitments.
These developments underscore the immense and growing scale of cloud computing resources required to power the future of artificial intelligence. The partnership between OpenAI and Oracle marks a landmark moment in how large-scale infrastructure supports next-generation technology.