OpenAI's$30bn Oracle deal:Largest AI deal that could reshape

The partnership is part of OpenAI’s Stargate initiative, an ambitious $500 billion plan to build out 10 gigawatts of AI infrastructure across the US over the next four years.

Oracle and OpenAI have signed a mammoth deal, which potentially amounts to OpenAI paying $30 billion annually to Oracle for its data centre services. OpenAI CEO Sam Altman confirmed the deal in a post on X (formerly Twitter), calling it a “gigantic infrastructure project.”

This unprecedented agreement has redefined the scale of cloud computing contracts, far eclipsing anything seen before in the industry.

Oracle’s $30 Billion Windfall

The size of the agreement came to light via Oracle’s June 2025 SEC filings, which disclosed an unnamed customer deal that would generate $30 billion in annual revenue, more than Oracle’s total global cloud revenue of $24.5 billion in FY2025. While Oracle initially did not reveal the client, OpenAI’s confirmation has now clarified that the deal centres around Stargate’s expansion.

For Oracle, the partnership is expected to more than double its cloud infrastructure business, positioning the company as a major supplier of AI compute capacity alongside Amazon, Microsoft, and Google.

A Deal Without Precedent

By comparison, most large enterprise or hyperscale customers typically lease 1 to 50 megawatts (MW) of power at a time. Annual costs for such leases generally range between $10 million and $500 million, with only a handful ever approaching the $1 billion mark. Leasing just 1MW of data centre space can cost approximately $3.2 million per year, making OpenAI’s 4,500MW lease truly extraordinary.

For Oracle, the deal is transformational. The company’s total worldwide cloud services revenue for fiscal 2025 was reported at $24.5 billion, less than the annual value of the OpenAI contract alone. Once fully operational, this agreement is expected to more than double Oracle’s cloud infrastructure business, positioning the company as a major force in powering artificial intelligence globally.

Broader Context: Stargate’s Delays and OpenAI’s Expansion

The staggering scale of the Oracle–OpenAI contract takes on added significance in light of delays that have beset the broader Stargate initiative.

Although it was unveiled at the White House in January 2025 with great fanfare, promising over 100,000 new jobs and $500 billion in infrastructure, Stargate has yet to finalise a single data centre project. Disagreements between SoftBank and OpenAI, particularly regarding financial structuring and site selection linked to SoftBank-owned SB Energy, have slowed progress considerably.

OpenAI, in the meantime, has pressed forward independently to secure the infrastructure it needs for training its next-generation models. In addition to the Oracle deal, the company has signed further agreements with providers such as CoreWeave, bringing it closer to achieving its original data centre goals, albeit without relying on Stargate’s formal structure.

A New Era for Infrastructure

The broader implications are clear: AI innovation is now driving cloud infrastructure requirements to levels unimaginable just a few years ago. As large language models grow in complexity and compute intensity, organisations like OpenAI are seeking custom-built, energy-intensive environments that go far beyond the traditional cloud model.

Oracle’s $30 billion annual deal not only represents the largest data centre lease in history, but it also sets a new bar for hyperscale cloud strategy—one that few others are positioned to match.

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