OpenAI and Oracle have struck a landmark cloud computing deal worth approximately $30 billion annually, under which OpenAI will lease an enormous 4.5 gigawatts (GW) of data center capacity across multiple U.S. locations. This deal is part of OpenAI’s broader Stargate infrastructure initiative aimed at massively scaling AI compute resources to support rapid AI model development and deployment.
Let’s look at details:
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Scale and Scope:
OpenAI will rent 4.5 GW of computing power from Oracle, which is roughly a quarter of the current operational data center capacity in the U.S. This is an unprecedented scale, with 4.5 GW being enough electricity to power millions of homes, illustrating the massive energy demands of next-gen AI models. -
Data Center Locations:
Oracle plans to build and expand hyperscale data centers in multiple states including Texas, Michigan, Ohio, Wisconsin, Pennsylvania, New Mexico, Georgia, and Wyoming. The existing 1.2 GW “Supercluster” campus in Abilene, Texas, will be expanded to about 2 GW, hosting up to 400,000 Nvidia GPUs, representing nearly $40 billion in hardware investment. -
Technology and Infrastructure:
The data centers will be equipped with tens of thousands of Nvidia’s latest GB200 AI chips and leverage Oracle’s Gen2 AI infrastructure, which supports large-scale AI workloads with ultra-low latency networking and HPC storage options. This infrastructure is designed to accelerate training of large language models (LLMs) and other AI applications. -
Strategic Importance:
While Microsoft Azure remains a key cloud partner for OpenAI, this deal diversifies OpenAI’s cloud infrastructure and significantly boosts its AI compute capacity. Oracle’s role as a major infrastructure provider marks a major leap for the company, transforming it into a powerhouse in AI cloud infrastructure almost overnight. -
Stargate Project:
The deal is part of the Stargate joint venture launched earlier in 2025 with partners including SoftBank and backed by Oracle and the Abu Dhabi sovereign fund MGX. Stargate aims to invest up to $500 billion globally in AI data center development over the coming years. So far, about $50 billion has been raised from founding partners. -
Market Impact:
Oracle’s share price surged to record highs following the announcement, with analysts predicting the deal could more than double Oracle’s data center revenues and reshape its position in the AI cloud market.
The OpenAI-Oracle deal is one of the largest AI cloud infrastructure agreements to date, enabling OpenAI to scale its AI model training and deployment capabilities dramatically. Oracle will build and operate massive new data centers across the U.S., equipped with cutting-edge Nvidia GPUs and AI infrastructure, as part of the Stargate initiative. This partnership significantly advances Oracle’s position in the AI cloud market and supports OpenAI’s mission to expand AI services like ChatGPT at scale