This week, OpenAI and Oracle shocked the markets with a $300 billion, five-year agreement that sent Oracle’s stock soaring. The deal underscores the fact that Oracle, despite its reputation as a legacy provider, remains a powerful force in AI infrastructure.
For OpenAI, the partnership highlights just how vast its computing appetite has become. While the specifics around payment and electricity sources remain unclear, the massive investment signals OpenAI’s determination to secure long-term compute power.
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According to Chirag Dekate, vice president at Gartner, the arrangement makes strategic sense. He noted that OpenAI benefits by diversifying its infrastructure across providers, reducing risk and gaining scaling advantages compared to rivals. “OpenAI seems to be building one of the most comprehensive global AI supercomputing foundations,” Dekate said, calling it an exemplary model ecosystem.
Some observers were surprised by Oracle’s role, given its lower profile in the AI boom compared to AWS, Microsoft Azure, and Google Cloud. But Oracle has a proven track record: it powers TikTok’s U.S. business and has decades of experience delivering high-performance cloud infrastructure.
Still, questions linger. OpenAI is reportedly committing around $60 billion annually for computers from Oracle, in addition to a $10 billion investment with Broadcom for custom AI chips. While revenue has grown to $10 billion annually, the company continues to burn through cash at a rapid pace.
Another challenge is energy. Running massive compute operations requires enormous power, and data centers are projected to consume 14% of all U.S. electricity by 2040. While Big Tech rivals are investing heavily in solar, batteries, and nuclear energy, OpenAI has been more reserved. CEO Sam Altman has made personal bets in nuclear and renewable startups like Oklo, Helion, and Exowatt, but the company itself has yet to commit to major energy projects.
With a 4.5 gigawatt compute deal, that could soon change. Oracle’s infrastructure expertise may allow OpenAI to remain “asset light,” keeping it aligned with software-centric valuations instead of the capital-heavy profiles of traditional tech firms.
This landmark deal not only boosts Oracle’s relevance in the AI race but also signals OpenAI’s relentless pursuit of scale in a world where compute and power are the ultimate constraints.
