OpenAI and Oracle Announce Landmark $30 Billion Data Center Partnership

OpenAI has finalized a $3 billion per year data center services agreement with Oracle, as first reported by The Wall Street Journal. The deal was confirmed by OpenAI CEO Sam Altman on social media, though financial specifics were not disclosed. Oracle initially revealed the contract in a June 30 SEC filing, which spurred its stock to record highs and briefly made founder Larry Ellison the world's second-richest person.

Image source note: The image is AI-generated, and the image licensing service provider is Midjourney.

The Scale of the Agreement

The partnership involves 4.5 gigawatts of power capacity—equivalent to the output of two Hoover Dams—as part of the previously announced $50 billion 'Stargate' data center project. This energy could power approximately 4 million households. Notably, the contract excludes Japan's SoftBank and represents over three times OpenAI's current annual revenue of $1 billion.

Infrastructure Challenges

The joint project will require significant resources:

• Construction in Abilene, Texas
• Oracle's capital expenditures: $21.2 billion (2025) and projected $25 billion (2026)
• Total two-year data center investment nearing $50 billion (excluding land costs)

These investments also support Oracle's existing client base beyond OpenAI's needs.

Financial Context

Altman recently disclosed OpenAI's annual recurring revenue reached $1 billion, up from $550 million in 2024. The Oracle deal dramatically outpaces this figure, underscoring the scale of AI infrastructure demands.

Key Points:

• 💡 Historic Contract: $3B/year agreement between OpenAI and Oracle
• ⚡ Massive Power Needs: 4.5GW capacity (two Hoover Dams' output)
• 🏗️ Construction Hub: Stargate project in Abilene, Texas
• 💰 Oracle's Spending: Nearly $50B on data centers in two years
• 📈 Revenue Gap: Deal triples OpenAI's current annual income