OpenAI has confirmed one of the largest cloud contracts ever signed, agreeing to purchase US$300 billion worth of computing power from Oracle over the next five years.

The deal forms part of Project Stargate, OpenAI’s ambitious initiative to develop extensive AI data centre infrastructure both in the US and internationally.

The companies plan to construct 4.5 gigawatts of data centre capacity, roughly equivalent to the output of two Hoover Dams or the electricity consumption of four million US homes.

While rivals such as Amazon, Microsoft, Google, and Meta have collectively pledged US$300 billion on AI centres this year, OpenAI’s single agreement with Oracle already surpasses the largest individual industry commitments, according to Tech Funding News.

For Oracle, the partnership has already had a significant impact.

The company’s share price surged more than 40% after reporting US$317 billion in new contract revenue last quarter, with OpenAI revealed as one of three key customers driving that growth.

Founder Larry Ellison’s net worth rose by over US$100 billion, placing him alongside Elon Musk among the world’s wealthiest individuals.

Yet Oracle is concentrating heavily on a single client, one that has not yet turned a profit.

OpenAI’s finances underscore the scale of the risk.

The company currently generates around US$10 billion in annual revenue, far short of the US$60 billion it will average in annual spending under this deal.

Reports indicate it could burn through US$44 billion before reaching profitability, a milestone CEO Sam Altman does not anticipate until 2029.

To reduce reliance on Microsoft, its primary backer and cloud partner, OpenAI has sought alternative arrangements, making Oracle a vital ally.

Project Stargate, first unveiled at the White House alongside President Donald Trump, Oracle CTO Larry Ellison, and Sam Altman, envisions at least US$500 billion in AI data centre investment.

Construction has already begun in Abilene, Texas, with additional facilities planned in Wyoming, Pennsylvania, Michigan, and New Mexico.

Oracle is collaborating with Crusoe Energy on several of these sites.

The venture extends beyond the US.

OpenAI, Oracle, SoftBank, and Emirati investment firm G42 are working on a mega data centre project in the UAE.

A unique financing clause ensures that every dollar G42 invests abroad is matched by equivalent funding for US facilities.

Nevertheless, the financial strain is clear.

Oracle’s debt to equity ratio stands at a staggering 427%, compared with just 32% for Microsoft.

The company is likely to borrow heavily to acquire the AI chips required for its new infrastructure.

OpenAI’s audacious contract reflects both confidence in AI’s potential and the pressure of global competition.

With rivals such as Google, Anthropic, and Meta advancing rapidly, and with its relationship with Microsoft becoming increasingly tense, OpenAI is betting that ChatGPT’s explosive adoption will expand into a vast ecosystem used by billions worldwide.

The company is committing to infrastructure on a scale beyond its current revenues, while Oracle is tying a substantial portion of its future to one ambitious, loss making partner.

If the gamble succeeds, both firms could cement themselves as central players in the AI era; if it fails, the costs may reshape Silicon Valley’s appetite for mega deals.

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