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OpenAI confirms $30 billion deal with Oracle for data centers

OpenAI's CEO Sam Altman has verified a major contract with Oracle for substantial data center services.

July 22, 2025 at 08:36 PM

OpenAI agreed to pay Oracle $30B a year for data center services

OpenAI confirmed a substantial contract with Oracle to enhance its data center capabilities.

OpenAI strikes $30 billion annual deal with Oracle for data centers

OpenAI has signed a groundbreaking contract with Oracle for data center services, reportedly valued at $30 billion per year. The details emerged following Oracle's SEC filing last month, where it revealed a major cloud deal but did not disclose the customer's identity. OpenAI's CEO, Sam Altman, confirmed the agreement in a blog post and on social media, solidifying the partnership's significance. This deal is part of a broader initiative called Stargate, a $500 billion project focused on expanding data center capacity, announced earlier this year with Oracle and SoftBank. The venture aims to provide OpenAI with 4.5 gigawatts of power, enough for around four million homes. However, the significant expenditure raises questions about the feasibility of such massive infrastructure amidst Oracle's growing capital expenditures.

Key Takeaways

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OpenAI's deal with Oracle marks a historic partnership worth $30 billion annually.

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The agreement is part of the larger Stargate project aiming for vast data center expansion.

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Oracle's stock surged following the initial announcement due to market speculation.

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The deal provides OpenAI with critical power capacity for its operations.

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Building this extensive data center entails significant costs and energy needs.

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The contract vastly exceeds OpenAI's current revenue, illustrating ambitious growth plans.

"This single commitment to Oracle is already triple per year what OpenAI currently brings in."

Altman emphasizes the significant financial commitment OpenAI has made with Oracle.

"OpenAI and Oracle still have to build this monster data center, which will be a costly endeavor."

The article stresses the challenges ahead for both companies in realizing the deal.

This deal highlights the escalating demand for cloud services and infrastructure as companies like OpenAI accelerate their growth. Not only does this partnership elevate Oracle's presence in the data center market, but it also challenges the company to deliver on an unprecedented scale. As Oracle ramps up its spending on infrastructure, it faces the dual challenge of meeting both OpenAI's soaring demands and its existing customer base. The outcome of this collaboration could redefine the competitive landscape in data services for AI-driven companies.

Highlights

OpenAI's deal triples current revenue, reshaping the financial landscape.
This partnership could define the future of cloud infrastructures.
The scale of this deal is unprecedented in tech collaborations.
Oracle faces challenges as spending on infrastructure skyrockets.

Financial risks associated with the Oracle-OpenAI partnership

The massive financial commitments involved in the deal raise concerns over Oracle's capital expenditures, as it is set to invest nearly $50 billion in data centers within two years. Such spending could lead to financial strain, especially if expected returns do not materialize promptly.

The evolving landscape of cloud services will continue to shape the future of tech and AI companies.

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openai oracle data centers cloud services stargate technology business

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