Athira Sethu
Kochi, 4 July 2025
OpenAI, the firm that owns ChatGPT, inked a gigantic cloud computing agreement with Oracle. The agreement is valued at approximately $30 billion annually, making it one of the largest cloud agreements globally.
Through the deal, Oracle will provide OpenAI with an enormous amount of computing capacity—4.5 gigawatts. This is nearly one-quarter of the total available data center capacity across the US at present. This computing capacity will be used by OpenAI to train and operate its advanced AI tools.
To underpin this, Oracle will construct new data centers throughout the United States. Texas, Michigan, Wisconsin, Wyoming, New Mexico, Georgia, Ohio, and Pennsylvania are some of the states that are being eyed for these centers.
Oracle will also enhance an existing data center expansion plan known as Stargate in Abilene, Texas, through the assistance of a technology start-up known as Crusoe.
The Stargate initiative is an ambitious project to construct additional data centers globally. The team behind the project comprises Oracle, SoftBank, and an Abu Dhabi investment fund. They intend to invest up to $500 billion across the globe, and already have raised approximately $50 billion.
Although Oracle did not openly mention OpenAI in the recent announcement, individuals familiar with the situation verified that OpenAI is the client behind this $30 billion-a-year agreement, which begins in 2028.
The stock prices of Oracle went up dramatically following this news. This new agreement is almost triple the size of what Oracle made from its data center business in 2025 (approximately $10.3 billion).
Oracle founder Larry Ellison aims to make the company the leading constructor of cloud infrastructure. He has vowed to spend $7 billion on Stargate and $25 billion on new infrastructure next year.
Under the deal, Oracle will also acquire 400,000 high-performance AI chips from Nvidia, which cost around $40 billion. The chips are to be deployed in the Texas data centers.
This transaction also indicates that OpenAI is interested in partnering with other companies beyond Microsoft, which has been its largest backer. OpenAI has also made cloud agreements with CoreWeave and Google.
OpenAI and Oracle have not made any comments on the transaction officially.
