OpenAI Oracle Deal Shakes Cloud Market with Massive $30B Bet

Key Points

• OpenAI Oracle Deal Shakes Cloud Market with Massive $30B Bet
• The agreement powers 4.5GW for the Stargate project
• Oracle’s stock hit record highs after deal disclosure
• Massive buildout begins at Stargate I in Texas

OpenAI has officially confirmed it’s the mystery company behind the jaw-dropping $30 billion per year deal with Oracle. The news, first reported by The Wall Street Journal, was later confirmed by OpenAI CEO Sam Altman in a post on X and a company blog update.

we have signed a deal for an additional 4.5 gigawatts of capacity with oracle as part of stargate. easy to throw around numbers, but this is a _gigantic_ infrastructure project.

some progress photos from abilene: pic.twitter.com/JfutuoYvn9

— Sam Altman (@sama) July 22, 2025

This isn’t just a big deal—it’s historic. To put this in perspective, Oracle made $24.5 billion in cloud revenue from all its customers combined in fiscal 2025. Now, OpenAI alone is set to pay more than that in a single year.

The partnership is all about power—literal and computational. The deal gives OpenAI access to 4.5 gigawatts of data center capacity, part of the larger Stargate project, a $500 billion data center initiative announced in January by OpenAI, Oracle, and SoftBank.

Though SoftBank is part of Stargate, the $30B arrangement only involves OpenAI and Oracle.

WSJ: OpenAI is committed to paying Oracle $30B per year within 3 years for 4.5 GW of data center capacity

Will require 2 Hoover Dams worth of energy pic.twitter.com/6DImvuXhyw

— Jordi Hays (@jordihays) July 22, 2025

How big is 4.5 gigawatts? That’s about the energy output of two Hoover Dams, or enough to power four million homes. It’s not just a power grab—it’s a strategic shift in the AI infrastructure arms race.

This move comes shortly after OpenAI’s involvement in major AI achievements, like winning gold at the 2025 Math Olympiad with Google AI. The company is aiming to dominate across both computation and intelligence benchmarks.

BREAKING: ORACLE OFFICIALLY AGREED TO SUPPLY OPENAI WITH 2 MILLION AI CHIPS

OpenAI’s new data center plans:
> 4.5 GW of compute
> new deal will cost openai $30B/year
> BTW softbank not involved anymore lol
> “SoftBank isn’t financing any of the capacity”
>“SoftBank hit snags… pic.twitter.com/NRpe5hC5J6

— NIK (@ns123abc) July 22, 2025

Inside Stargate and Oracle’s massive investment

The Stargate I facility, located in Abilene, Texas, is where all this infrastructure will come to life. But building this monster won’t be easy—or cheap.

For Oracle, this deal is a massive bet on the future of AI. The company spent $21.2 billion in capital expenditures last fiscal year and expects to shell out another $25 billion this year, mostly aimed at expanding its data center footprint.

That’s a near $50 billion investment in just two years—and doesn’t even include real estate purchases.

REMEMBER THAT COMPANY ORACLE DISCLOSED 2 WEEKS AGO THAT WOULD PAY THEM $30B A YEAR STARTING IN 2028?

well, that company is OpenAI

4.5 GW datacenter

AI buildout is not slowing down 🚀$NVDA $ORCL pic.twitter.com/Dpp5RRApzu

— amit (@amitisinvesting) July 22, 2025

What makes this partnership unique is its sheer scale. While cloud giants like AWS and Microsoft Azure dominate the market, Oracle is positioning itself as the go-to partner for AI companies needing tailored infrastructure. The OpenAI Oracle deal is the boldest example yet.

Still, OpenAI’s choice raises questions. The company recently hit $10 billion in annual recurring revenue, a steep rise from $5.5 billion just a year ago.

Yet this single Oracle contract alone is three times that amount, suggesting that OpenAI is betting heavily on future growth—and possibly further rounds of funding to sustain this scale.

Oracle has been doing really amazing over the last few years, especially with all their AI stuff.

They just secured $30B OpenAI cloud deal and committed to 4.5GW data center build.

Super bullish on $ORCL. Look at those nice fundamentals. pic.twitter.com/vJSDpmkKFq

— Rallies (@ralliesai) July 22, 2025

It’s worth noting that OpenAI has also delayed other major initiatives due to resource constraints—such as the postponed launch of its open model. This Oracle deal may be an attempt to fix exactly that bottleneck.

Why OpenAI didn’t go with Azure this time

What’s interesting here is OpenAI’s pivot. Microsoft Azure has long been OpenAI’s key cloud partner and investor. Microsoft poured billions into OpenAI and runs GPT models on its own Azure infrastructure. So why bring Oracle into the mix?

It turns out this isn’t about replacing Azure—it’s about capacity and diversification.

According to OpenAI, the Stargate project is designed to meet future infrastructure needs that go far beyond current capabilities. With GPT-5, GPT-6, and other frontier models on the horizon, the demand for computing power will multiply rapidly. Azure might still be in the picture, but Oracle gives OpenAI another path to scale.

And Oracle isn’t just any partner. Larry Ellison, Oracle’s co-founder and CTO, is reportedly all-in on AI. Following the announcement, Oracle stock reached record highs, pushing Ellison to become the world’s second-richest person, according to Bloomberg.

So, while Microsoft provides general AI hosting and tools through Azure—including the new Copilot Vision platform—Oracle is helping OpenAI build out custom, large-scale compute infrastructure from the ground up.

The AI data race is just getting started

This OpenAI Oracle deal also highlights a bigger trend: AI is redefining the future of cloud infrastructure. We’re moving beyond off-the-shelf cloud services to bespoke, high-powered systems built for AI training and deployment at unprecedented levels.

Stargate is the first of several such mega-projects expected to rise over the next decade. And it sets a clear bar—if you want to lead in AI, you need to own your scale.

OpenAI isn’t alone. Competitors like Anthropic, xAI, and Mistral are also ramping up their infrastructure investments. But few, if any, have committed to a data center buildout of this magnitude.

New tools and models are dropping fast. OpenAI recently launched its powerful ChatGPT Agent, and voice recognition is evolving rapidly with startups like Le Chat entering the market. Even governments are turning to AI, using models like Cyclone AI to predict and respond to natural disasters.

This means partnerships between AI firms and cloud providers will only grow more strategic. Oracle, long seen as a legacy player, now finds itself in a new spotlight—thanks to a bold move by OpenAI and a shared vision of scaling AI to the next level.