OpenAI has signed a cloud infrastructure deal with Oracle worth $30 billion per year, securing 4.5 gigawatts of computing power.

The agreement is among the largest AI-focused cloud deals to date and is part of OpenAI’s broader “Stargate” initiative launched with SoftBank in January 2025.

Oracle will build multiple new data centres across the U.S. to meet this demand.

The 4.5GW of capacity represents nearly one-quarter of the country’s current operational data centre infrastructure, according to people familiar with the plans.

Stargate Aims for $500bn in Global Data Centre Investments

Stargate, the joint venture between OpenAI and SoftBank, plans to invest up to $500 billion in data centre development in the U.S. and internationally.

Founding partners OpenAI, Oracle, SoftBank, and Abu Dhabi’s sovereign wealth fund MGX have raised about $50 billion for the venture. The portion of capital already deployed has not been disclosed.

Oracle will expand an existing 1.2GW Stargate facility in Abilene, Texas, led by start-up Crusoe.

Other potential locations under consideration include Texas, Michigan, Wisconsin, Wyoming, New Mexico, Georgia, Ohio, and Pennsylvania.

Oracle Ramps Up Cloud Infrastructure to Meet AI Demand

Earlier this week, Oracle announced a cloud deal worth $30 billion annually beginning in 2028 without identifying the customer.

Sources confirmed to the Financial Times that OpenAI is the client tied to the Stargate expansion.

Oracle shares surged to record highs following the news. The deal value is nearly three times the $10.3 billion the company earned from its infrastructure business in 2025.

Oracle plans to purchase about 400,000 Nvidia GB200 chips for approximately $40 billion to power the Abilene site.

Oracle’s founder, Larry Ellison, has emphasised the company’s strategic growth, stating, “Oracle will be the number one builder and operator of cloud infrastructure data centres. We will build and operate more cloud infrastructure data centres than all of our cloud infrastructure competitors”.

OpenAI Diversifies Beyond Microsoft with New Cloud Partners

The deal reflects OpenAI’s move to diversify its cloud infrastructure partnerships. Earlier this year, OpenAI renegotiated terms with Microsoft, its largest investor, ending exclusive hosting rights but allowing Microsoft first refusal on contracts.

Since then, OpenAI has signed new cloud agreements with Google and CoreWeave.

Ellison appeared alongside OpenAI CEO Sam Altman and SoftBank chair Masayoshi Son at the White House earlier this year when the Stargate initiative was publicly introduced.

Oracle has pledged to invest $7 billion into the joint venture and plans $25 billion in capital expenditures next year, exceeding earlier estimates.

PHOTO: UNSPLASH

This article was created with AI assistance.