Oracle shares soared after hours following news that the company signed several multi-billion-dollar contracts. One of those customers appears to be OpenAI.
OpenAI’s $300 Billion Compute Deal
According to the Wall Street Journal, OpenAI has agreed to purchase roughly $300 billion worth of compute power from Oracle over the course of five years. The deal would begin in 2027, positioning it as one of the largest cloud contracts ever signed.
Oracle declined to comment on the report, while OpenAI has yet to respond to requests for confirmation.
Expanding Beyond Microsoft
This is not OpenAI’s first engagement with Oracle. The AI company began working with Oracle in mid-2024 and has steadily diversified its cloud partnerships. In January, OpenAI moved away from relying exclusively on Microsoft Azure, a notable shift given the companies’ long-standing collaboration.
Part of that pivot involved the Stargate Project, a $500 billion investment plan backed by OpenAI, SoftBank, and Oracle to build domestic data centers over the next four years.
OpenAI’s rapid expansion has created immense demand for compute power. Alongside Oracle, the company has also reportedly struck a cloud agreement with Google earlier this year, despite the two being direct competitors in the AI race.
What The Author Thinks
A $300 billion cloud deal shows just how desperate OpenAI is to secure the resources it needs, but it also highlights the unsustainable costs of today’s AI boom. Locking in such massive contracts may ensure short-term growth, yet it risks overextending in an industry where hardware, regulation, and consumer interest can change quickly. OpenAI’s challenge will be proving that this unprecedented spend actually delivers lasting value — not just for its models, but for the people expected to use them.
Featured image credit: ykanazawa1999 via Flickr
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