OpenAI Confirmed as Oracle's $30 Billion Annual Data Center Customer

OpenAI has been confirmed as the customer behind Oracle's $30 billion per year data center services agreement, according to a Wall Street Journal report and statements from OpenAI CEO Sam Altman. While Altman acknowledged the partnership in a post on X and a company blog, he did not confirm the exact financial terms.

Oracle first disclosed the major cloud services deal in a June 30 SEC filing, but did not name the client. The announcement contributed to a surge in Oracle's stock price, temporarily making founder Larry Ellison the world's second richest person, according to Bloomberg.

The agreement is part of the Stargate project, a $500 billion initiative announced in January by OpenAI, Oracle, and SoftBank to build large-scale data center infrastructure. The deal covers 4.5 gigawatts of capacity—an amount equivalent to the output of two Hoover Dams and enough to power about four million homes, as reported by the Wall Street Journal. SoftBank is not involved in the $30 billion contract.

Construction of the new data center, referred to as the Stargate I site, is planned for Abilene, Texas. Both companies face significant financial and logistical challenges in building and operating the facility. Oracle CEO Safra Catz reported that the company spent $21.2 billion on capital expenditures last fiscal year and expects to invest another $25 billion this year, mainly for data centers serving both OpenAI and other clients.

OpenAI's annual recurring revenue recently reached $10 billion, according to Altman, meaning the Oracle contract represents a commitment three times greater than the company's current yearly revenue and does not account for other ongoing expenses.