OpenAI Agreed to Pay Oracle $30 Billion Annually for Data Center Services
OpenAI has confirmed it is the company behind the $30 billion-per-year cloud services deal with Oracle, as first reported by The Wall Street Journal. Although CEO Sam Altman didn’t mention the figure directly, he acknowledged the partnership in a post on X and a company blog on Tuesday. This announcement ends weeks of speculation following Oracle’s June SEC filing that revealed the massive deal but not the customer’s identity.
The original filing, dated June 30, sent Oracle’s stock soaring. As a result, company founder Larry Ellison briefly became the world’s second richest person, according to Bloomberg. Until now, industry watchers speculated who might require such an enormous volume of data infrastructure. For context, Oracle reported $24.5 billion in cloud revenue across all customers in fiscal 2025 well below the scale of this single contract.
A Key Piece of the Stargate Project
This deal, as OpenAI explained, is tied to 4.5 gigawatts of capacity under the Stargate project. Stargate is a $500 billion data center initiative launched in January by OpenAI, Oracle, and SoftBank. However, the $30 billion agreement appears to be strictly between OpenAI and Oracle SoftBank is not involved in this specific contract.
To put the numbers in perspective, 4.5 gigawatts is roughly the output of two Hoover Dams. That amount of energy could power around four million homes. However, with this scale comes enormous complexity. The facility, dubbed Stargate I, will be located in Abilene, Texas. While ambitious, building this site will demand immense capital, energy, and coordination.
Rising Infrastructure Costs for Oracle
Although this contract represents a huge win for Oracle, it also comes with significant costs. CEO Safra Catz noted in June that Oracle spent $21.2 billion on capital expenditures in its last fiscal year. Furthermore, it expects to spend another $25 billion this year almost $50 billion in two years, mostly to expand and support its data center footprint. Notably, this spending also supports Oracle’s existing customer base.
It’s important to consider OpenAI’s current financial standing. According to Altman, the company recently crossed $10 billion in annual recurring revenue, nearly doubling from $5.5 billion last year. Still, this single Oracle deal triples its current revenue figure and doesn’t account for its other infrastructure and operational costs.
As OpenAI scales to meet demand, its infrastructure strategy is becoming as ambitious as its AI goals.
