Oracle has disclosed a staggering $30 billion-a-year contract with OpenAI, signifying a major strategic leap in AI infrastructure. This agreement entails collaboration on significant data center projects, including the Stargate initiatives in Texas and the UAE, marking a global expansion in infrastructure.
The deal is expected to significantly impact Oracle’s financials shortly. The Financial Times indicated that additional sites for data centers might include new regions in the Midwest and West of the United States. OpenAI is set to lease about 4.5 GW of capacity, with potential growth in the existing Abilene, Texas, data center to 2 GW.
However, the financial reflection of the leasing agreement won’t appear until 2028. Meanwhile, Oracle’s CEO, Safra Catz, noted extraordinary growth, with commitments expected to double in fiscal 2026. “This is a situation that we have not seen in our history,” she remarked, emphasizing the unprecedented demand.
Chairman and CTO Larry Ellison mentioned that if the Stargate project performs as expected, it might result in understated growth predictions. Oracle aims to launch up to 10 global Stargate projects, broadening its global presence.
Ellison assured stakeholders that Oracle aspires to dominate as the leading cloud database, applications, and infrastructure company. Expansion requires substantial capital, with a projected $25 billion expenditure in the upcoming year, primarily for revenue-generating equipment, not land or buildings.
Catz explained the rationale behind it, stating, “We are putting out as much capacity as we possibly can as quickly as we can.” Ellison highlighted the urgent demand: “People are calling up and asking us, ‘Please, can you find us more capacity? We’ll take it wherever.’”
As Oracle scales its data center capabilities, it expects accelerated revenue and profit growth. In fiscal 2025, cloud infrastructure revenue surged 51% to $10.2 billion, with an anticipated increase exceeding 70% in fiscal 2026. Catz confidently declared, “Oracle is well on its way to being not only the world’s largest cloud application company but also one of the world’s largest cloud infrastructure companies.”
