A $300 billion OpenAI-Oracle deal could shape the balance of power in the AI race
The record-breaking contract highlights OpenAI’s growing demand for compute power and Oracle’s rising influence in the cloud wars.
It’s been a wild year for Oracle co-founder Larry Ellison. Thanks to a surge in Oracle’s stock, driven by stronger-than-expected earnings, his fortune has ballooned by $89 billion. That was enough, at least for a moment on Wednesday, to push him past Elon Musk and crown him the world’s richest man with a net worth of $383.2 billion.
And just as that headline started making waves, another one dropped. The Wall Street Journal reports that Oracle has landed one of the biggest cloud contracts in history, with OpenAI agreeing to spend around $300 billion on Oracle’s compute power over the next five years, starting in 2027.
To put that into perspective, $300 billion is larger than the GDP of many countries. It shows just how hungry AI companies are for raw compute. Training and running advanced models, like ChatGPT, takes staggering amounts of energy and infrastructure, and partnerships like this are shaping the balance of power in the AI race.
Louis Eriakha
At the same time, this deal builds on a relationship that started in 2024, when OpenAI first began using Oracle for compute. Then, earlier this year, Oracle teamed up with OpenAI and SoftBank on the Stargate Project—a $500 billion plan to build massive new data centers across the United States. Oracle, once an underdog to Microsoft and Google in the cloud market, is now positioning itself as a critical supplier to the world’s most visible AI company.
On OpenAI’s side, the story is just as telling. The company expects revenues to hit nearly $13 billion this year, all while balancing a $10 billion chip design contract with Broadcom. And by spreading its cloud workloads across Oracle, Google, and others, OpenAI is quietly reducing its dependence on Microsoft Azure. That diversification could give it more leverage as the scramble for compute gets more cutthroat.
Zoom out, and you see the pattern clear as day. Cloud providers aren’t just chasing enterprise clients anymore. They’re fighting for the contracts that will power AI’s explosive growth. Meta, for example, recently inked a $10 billion deal with Google, and more mega-announcements are likely coming.
If confirmed, the Oracle–OpenAI contract will not only rank as one of the largest cloud agreements ever signed. It also underlines a new reality in AI where owning the infrastructure may end up being just as important as owning the algorithms.
Techloy
