OpenAI Reportedly Strikes $300 Billion Cloud Deal with Oracle to Power AI Push

OpenAI is preparing to make one of the largest technology infrastructure commitments in history, with reports suggesting it has agreed to pay Oracle $300 billion over five years in exchange for massive computing capacity to drive its artificial intelligence ambitions.

The Wall Street Journal, citing unnamed sources, said the agreement is slated to begin in 2027 and would secure five gigawatts of compute power for the Sam Altman–led company. The deal underscores the extraordinary scale of infrastructure required to fuel the next generation of AI systems but also raises questions about OpenAI’s ability to fund such commitments.

The AI company currently generates around $10 billion in annual recurring revenue but is not expected to turn a profit until 2029. Funding support may come from partners and investors, including SoftBank, which has reportedly pledged $19 billion to OpenAI’s Stargate initiative—a multi-billion-dollar project aimed at building massive AI data centers.

The latest development follows OpenAI’s announcement last month that Oracle would provide 4.5 gigawatts of additional compute, raising its total commitment to 5 gigawatts. Industry analysts estimate that level of capacity could support as many as two million GPUs, at a hardware cost alone approaching $100 billion. The broader expense of building data centers and power infrastructure would be significantly higher.

OpenAI is also investing in developing its own in-house silicon in collaboration with Broadcom, which could help optimize long-term costs and reduce dependency on GPU makers like Nvidia.

For Oracle, the partnership has already delivered tangible market benefits. Shares of the database giant surged by more than 30 percent in after-hours trading this week, boosting founder and CTO Larry Ellison’s net worth and putting him closer to surpassing Elon Musk as the world’s richest person. The rally was fueled by a sharp rise in Oracle’s purchase commitments, which soared 359 percent to $455 billion.

Oracle CEO Safra Catz projected strong growth for the company’s cloud infrastructure business, forecasting revenues to rise from $18 billion this year to $144 billion annually by 2031. Still, industry observers note that such commitments are only as strong as the customers behind them—leaving doubts about whether OpenAI, with its heavy spending and delayed profitability, can sustain such an unprecedented financial undertaking.

Whether the contract is executed in full or rolled out gradually remains unclear. But the scale of the reported agreement highlights both the immense costs of leading the AI race and the growing influence of infrastructure providers like Oracle in shaping the sector’s future.