OpenAI has officially confirmed it is the client behind Oracle’s recently disclosed $30 billion-per-year cloud services deal.
While CEO Sam Altman did not reveal the dollar amount, his confirmation ends weeks of speculation.
The Wall Street Journal first reported the agreement. It detailed that Oracle’s original SEC filing on June 30 hinted at a massive contract, though the WSJ withheld the client’s identity.
Altman later confirmed the deal in a post on X and on the company blog.
Oracle’s Stock
Oracle’s announcement sent its stock soaring to a record high. The news also elevated its co-founder, Larry Ellison, to the second-richest person in the world, according to Bloomberg.
To put the deal in perspective: Oracle reported $24.5 billion in cloud service revenue across all customers for fiscal year 2025.
This single contract with OpenAI now exceeds that number.
The Stargate Project
The deal forms part of the broader Stargate project, which was announced in January 2025.
Stargate is a $500 billion initiative by OpenAI, Oracle, and SoftBank to build large-scale AI infrastructure.
This particular agreement, however, does not include SoftBank. Under the terms, Oracle will provide 4.5 gigawatts of data center capacity.
That level of power is roughly equivalent to two Hoover Dams. It could supply electricity to four million homes. This energy will support OpenAI’s growing compute needs.
A Strategic Location
The first of these massive data centers will rise in Abilene, Texas. OpenAI refers to the location as “Stargate I.”
This facility is still under construction as building it will require significant time, resources, and regulatory oversight.
Energy demands alone make the project a complex endeavor. But both OpenAI and Oracle are moving forward with urgency.
Oracle’s Investment
Oracle is also spending heavily to meet growing demand. CEO Safra Catz revealed that the company invested $21.2 billion in capital expenditures last fiscal year.
It plans to spend another $25 billion this year. Most of that money is going into data center development.
This level of investment supports both existing clients and new contracts such as OpenAI’s.
OpenAI’s Revenue
OpenAI’s annual recurring revenue has grown sharply. Altman reported the company now generates $10 billion per year, up from $5.5 billion last year.
Even so, the Oracle deal alone amounts to three times OpenAI’s current income. It does not cover the company’s other expenses, such as payroll, R&D, or existing data center agreements.
Long-Term Rewards
Despite this gap, OpenAI appears confident. The company is investing ahead of demand. By securing infrastructure now, it aims to lead the next phase of AI adoption.
This strategy mirrors how Amazon Web Services (AWS) once invested billions before turning profitable. OpenAI is likely betting that AI will become as essential as cloud computing is today.
