Openai Commits $300 Billion To Oracle Partnership From 2027 - Arabian Post

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OpenAI will purchase approximately $300 billion worth of cloud computing capacity from Oracle over a five-year period beginning in 2027, according to statements from the companies and industry analysts. The deal is among the largest ever in the cloud infrastructure sector, and is intertwined with OpenAI and Oracle's joint Stargate initiative.

The agreement requires Oracle to supply 4.5 gigawatts of power-capacity for the data centres that will be built as part of the Stargate project, an initiative shared with SoftBank and others aiming to scale infrastructure for AI training and inference. Oracle claims its cloud infrastructure revenue jumped 77% year-over-year, helped by multiple such large contracts, and reported future contract value exceeding US$317 billion.

OpenAI currently generates far less annual revenue than what this deal implies in payments, and operating at a loss is expected until growth in scale and product monetisation catches up. Analysts note the financial risk for both parties: for OpenAI, huge infrastructure spend locked in well ahead of revenue matching; for Oracle, a need to invest heavily in data centre capacity, power, and financing.

Observers see the transaction as a shift in Oracle's role in the cloud ecosystem. Once seen primarily as a software and database firm, it is now accelerating its evolution into a major AI infrastructure provider. The success of the deal depends on Oracle's ability to deliver on scale, efficiency, and energy sourcing-issues that have drawn scrutiny from those worried about environmental impact and cost of operations.

OpenAI is expanding its supplier base beyond Microsoft Azure, seeking to reduce dependency on any single provider and gain negotiating leverage. Its strategic chip-design partnerships-such as with Broadcom-are intended to help manage hardware supply constraints and costs. Oracle's leadership, including CEO Safra Catz, affirmed that its recent earnings were heavily driven by large scale cloud contracts, and that the market has responded with stock surges; Larry Ellison's wealth has increased sharply as a result of investor optimism.

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Power requirements loom as a central challenge. To operate 4.5 gigawatts of data centre capacity, Oracle needs reliable access to large amounts of electricity. Questions remain about whether that power will come from renewable sources, how grid constraints will be managed, and how environmental regulatory frameworks will interact with expansion plans.

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