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OpenAI Signs $300 Billion Deal with Oracle to Power AI Expansion

Prime Highlight

  • OpenAI has signed a $300 billion deal with Oracleunder Project Stargate to secure massive computing power for AI projects starting in 2027.
  • The partnership underscores the growing scale of investments requiredto lead in AI, involving SoftBank, Donald Trump, and huge data centers consuming 4.5 gigawatts of electricity.

Key Facts

  • OpenAI expects its AI tools to generate $12.7 billion in revenue in 2025, and is also working on a $10 billion AI chip deal with Broadcom.
  • Oracle’s cloud revenue rose 77% in Q1, boosted by major contracts, including OpenAI’s, adding $317 billion in future contracts.

Background

OpenAI has signed a $300 billion deal with Oracle to get computing power for its artificial intelligence projects. The contract, starts in 2027, is part of Project Stargate. The project also involves SoftBank and former U.S. President Donald Trump and will include building huge AI data centers requiring 4.5 gigawatts of electricity.

The agreement highlights the magnitude of investments required to operate high-level AI systems. Popular AI tools created by OpenAI are expected to fetch approximately $12.7 billion this year. The firm is also collaborating on another deal with Broadcom worth $10 billion to develop its own AI chips, which will help it to consolidate its technology business.

The deal is also good news for Oracle. The company reported that its cloud revenue rose 77% in the first quarter, helped by big contracts, including OpenAI’s. Oracle CEO Safra Catz confirmed that three companies signed four deals worth billions, adding $317 billion in future contracts in just one quarter. The news also pushed Oracle’s stock higher and contributed to Chairman Larry Ellison becoming the richest person in the world.

Analysts report that the deal indicates that AI is becoming the heart of the tech industry. Firms such as OpenAI require large quantities of computer processing to create better AI models, while cloud companies like Oracle benefit from long-term contracts and higher revenues.

This acquisition underscores how the tech landscape is rapidly evolving and how large investments are required to be the leader in AI. OpenAI and Oracle are leading this change, and they are defining the future of artificial intelligence and cloud computing.