OpenAI has confirmed a deal worth billions to partner with Oracle for data center services. The partnership was first disclosed by Oracle in June, which reportedly generated $30 billion per year in revenue for the company. Oracle’s stock surged after the announcement, making its founder and CTO Larry Ellison the second richest person in the world.
The identity of the customer was unknown until OpenAI CEO Sam Altman confirmed the details on Tuesday in an X post and a company blog post. The $30 billion deal is part of Stargate, a $500 billion data-center-building project between OpenAI, Oracle, and SoftBank. The partnership will provide 4.5 gigawatts of capacity, equivalent to two Hoover Dams, which can power about four million homes.
While the deal is massive, it’s not without its challenges. Both parties must invest heavily in building the monster data center at the Stargate I site in Abilene, Texas. Oracle has already spent $21.2 billion on capital expenditures in its last fiscal year and expects to spend another $25 billion this year.
OpenAI’s recent financial performance is also noteworthy. The company recently hit $10 billion in annual recurring revenue, up from around $5.5 billion last year. This deal with Oracle is already triple what OpenAI currently generates annually, excluding other expenses like data center commitments.
Source: https://techcrunch.com/2025/07/22/openai-agreed-to-pay-oracle-30b-a-year-for-data-center-services