Oracle shares surged in after-hours trading on Tuesday following reports that the company had secured several multi-billion-dollar contracts with major customers. Now, details are emerging that one of those customers is none other than OpenAI, the Microsoft-backed artificial intelligence company at the center of the current AI boom.
According to a report from the Wall Street Journal, OpenAI has agreed to purchase $300 billion worth of compute power from Oracle over a five-year period starting in 2027. If confirmed, the deal would represent one of the largest cloud contracts ever signed, placing Oracle in a commanding position within the fast-expanding AI infrastructure race.
Oracle declined to comment on the report, and OpenAI did not respond to requests for confirmation. Still, Wall Street reacted swiftly to the news, with the shares of Oracle climbing as investors digested the significance of a potential anchor contract that would rival or exceed the largest commitments ever disclosed in the cloud industry.
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The deal also underscores a deepening partnership. OpenAI first began tapping Oracle for compute capacity in mid-2024, diversifying away from its heavy reliance on Microsoft Azure. In January 2025, the shift became more pronounced, with OpenAI moving further away from Azure as its exclusive cloud provider. The decision coincided with the launch of the so-called “Stargate Project,” a $500 billion initiative backed by OpenAI, Oracle, and SoftBank to build out massive domestic data centers over the next four years.
The reported agreement suggests that OpenAI is locking in as much long-term compute supply as possible, hedging against both soaring demand and potential bottlenecks in GPU and cloud capacity. Already this year, OpenAI has expanded its cloud footprint beyond Microsoft and Oracle, reportedly striking a deal with Google as well, according to Reuters. That move illustrated the paradox at the heart of the AI race: even fierce competitors are becoming infrastructure partners as the hunger for computing power outpaces what any single provider can supply.
Oracle’s Bet on OpenAI Could Redefine the Cloud Race
If confirmed, OpenAI’s $300 billion commitment to Oracle would cement the database giant’s transformation into a heavyweight contender in cloud computing—an arena long dominated by Amazon Web Services, Microsoft Azure, and Google Cloud. It would also position Oracle as one of the few companies directly enabling the compute-heavy workloads that underpin OpenAI’s ambitions, from training ever-larger models to deploying them at scale.
For Oracle, which has spent years lagging behind the big three cloud providers, the deal could prove pivotal. Analysts say the agreement would not only lock in revenue visibility but also establish Oracle as an indispensable partner in AI infrastructure at a time when the company is working to redefine its relevance in the cloud era.
A $300 billion contract spread over five years would deliver stable, recurring revenue on a scale previously unseen in Oracle’s cloud business. Combined with the Stargate Project, the contract could cement Oracle’s place as an indispensable partner for the most compute-intensive workloads in the industry.
For OpenAI, the benefits would be equally transformative: locking in access to massive compute resources would provide the security needed to train ever-larger AI models while insulating it from shortages and pricing spikes. In this scenario, Oracle’s stock could continue its rally as investors re-rate the company’s cloud prospects, while OpenAI secures the infrastructure necessary to maintain its lead in artificial intelligence.
However, there are challenges. For Oracle, the concentration of so much revenue from a single client could expose it to volatility if OpenAI changes course or runs into financial or regulatory headwinds. The deal’s sheer size raises questions about execution: can Oracle scale its infrastructure to reliably deliver $300 billion in compute capacity starting in 2027?
For OpenAI, spreading contracts across Oracle, Microsoft, and Google reduces dependency, but it also locks the company into long-term commitments at a time when AI compute efficiency is improving rapidly. Should breakthroughs lower the cost of training and inference, OpenAI could find itself bound to overpriced contracts. And with regulators in the U.S. and Europe increasingly scrutinizing AI concentration and cloud dominance, the partnership could draw political as well as financial risks.
However, OpenAI is sending a strategic message that it cannot afford to be dependent on a single provider if it hopes to sustain its aggressive growth and model development. By spreading contracts across Microsoft, Google, and Oracle—and anchoring massive projects like Stargate—the company is building a compute safety net that ensures it has access to the resources needed for its next leaps in artificial intelligence.