Sources: OpenAI signs a contract with Oracle to purchase $300B in computing power over roughly five years, requiring 4.5 gigawatts of capacity, starting in 2027

The vast majority of new revenue revealed by Oracle will come from OpenAI deal, sources say — OpenAI signed a contract …

Wall Street Journal 2025-09-11 Berber Jin

Context & Ripple Effects

OpenAI and Oracle had already outlined 4.5GW of additional U.S. data-center capacity and reports had tied that build-out to Stargate-era compute leasing. This contract turns that capacity plan into a defined long-term customer commitment.

The significance is less a new cloud region than the scale of the offtake: Oracle’s AI-infrastructure expansion is increasingly anchored to one buyer rather than diversified, on-demand cloud consumption.

First-order effects

OpenAI secures a multi-year route to the compute capacity it needs from 2027, while Oracle gains a large contracted demand base for the associated build-out.
Oracle must deliver infrastructure sufficient for 4.5GW, concentrating both expected cloud revenue and execution exposure in the OpenAI relationship.

Second-order effects

Capacity, power, and data-center construction tied to the agreement become committed to OpenAI rather than available for Oracle’s broader cloud customer base; the earlier reported 4.5GW rental plan now has a clearer commercial rationale.
The commitment strengthens Oracle’s case for financing and procuring AI infrastructure, while making delivery schedules and customer concentration more consequential to its cloud economics.

Third-order effects

If similar agreements proliferate, frontier AI labs and cloud providers will increasingly use long-duration compute offtakes to underwrite utility-scale infrastructure rather than relying principally on elastic cloud purchasing.
That model can accelerate capacity construction, but it also shifts more risk into long-term contracts: a small set of AI customers becomes central to infrastructure financing and provider revenue visibility.

The trend: AI compute is becoming a contracted infrastructure market in which long-term offtake commitments finance multi-gigawatt data-center capacity.

Discussion

NewsMax.com NewsMax.com on x
OpenAI, Oracle Sign $300 Billion Computing Deal
@cloudventures_ @cloudventures_ on x
Oracle's entire business relies on OpenAI raising capital and paying for compute I get it's bullish but damn that's one hell of a concentration risk of customers
@kakashiii111 @kakashiii111 on x
So, Oracle reported their backlog for the next five years to distract from the double miss. This backlog depends on OpenAI continuing to raise funds, eventually turning profitable, and Nvidia effectively renting its own GPUs. This late-stage AI earnings fantasy is getting more
@pythiar @pythiar on x
JPM on the nuances & longer term considerations of the $ORCL RPO numbers. [image]
@benbajarin Ben Bajarin on x
Also ~40,000 racks.
@_4lex_4 @_4lex_4 on x
ORCL added $350B of MC today bc their RPO backlog increased 359% from $99bn to $455bn. $300bn out of the $355bn increase came from an OpenAI contract. Does OpenAI even think they will be profitable by 2029 😂 😂 Employees are selling stock at a $500B valuation as fast as they
@benbajarin Ben Bajarin on x
I wonder if Oracle is where OpenAI will host their custom ASIC compute rack/clusters.
@pineconemacro @pineconemacro on x
So OpenAI who loses $5B on $13B in revenue in 2025 is going to give Oracle $300B over 5 years? [image]
@steve2bacon @steve2bacon on x
So Oracle's revenue and future revenue mostly comes from Nvidia, AMD, Meta, OpenAI and xAI. Meta, OpenAI, and xAI also runs on Nvidia and AMD... [image]
@capitalobserver Tsachy Mishal on x
We now know the vast majority of the $ORCL RPO was a single OpenAI contract. We also know that $MSFT passed on this business. So either have to believe that -It was not profitable enough for $MSFT -$ORCL is just so much better at setting up GPUs -$was too risky for $MSFT
@morqon Morgan on x
openai's contract with oracle is twice as big as previously reported, $300 billion over five years, two-thirds of oracle's booked future revenue, potentially replacing microsoft as their biggest customer “among the largest cloud deals ever” [image]
@kakashiii111 @kakashiii111 on x
So OpenAI is the one behind the $300B cloud deal with Oracle, meaning they plan to spend $60B annually with Oracle for the next five years (not including CoreWeave, Microsoft, and others). I guess @TheInformation needs to update their cash-burning projection for OpenAI.
@munster_gene Gene Munster on x
I thought we were in the 3rd inning. Now it's looking more like the 1st. $ORCL https://genemunster.com/...
@amitisinvesting Amit on x
BREAKING: Oracle and OpenAI have signed a deal worth $300B, the largest cloud computing contract in history as per the Wall Street Journal. Looks like we found the customer responsible for Oracle's 350% increase in remaining performance obligations. My goodness. $ORCL [image]
@hedgeyecomm @hedgeyecomm on x
$ORCL RPO ex-OpenAI was $155B (vs consensus $154B) or 56% YoY I realize thinking like this doesn't add much value because OpenAI did happen and the $$$s are there... But the size/concentration does make you question 1) the margin $ORCL is getting on the $300B and 2) the [image]
@benbajarin Ben Bajarin on x
Just like I said yesterday, those with the buildings/power contracts secured, etc., if you own it they will come.
@kakashiii111 @kakashiii111 on x
Oracle and OpenAI, until proven otherwise, have probably signed a Letter of Intent (LOI) or Memorandum of Understanding (MOU). RPO can only include amounts from signed, legally binding contracts where the company has a contractual right to receive payment. Oracle booking a [image…
@ftorre104 Federico Torre on x
Open AI has raised ~$60 billion and has revenue of $12b/yr, of which they are losing money. Yet they committed $300b to $ORCL, boosting Oracle's backlog to $455b and making the stock jump huge. Seems like a very soft/not-so-secure deal... [image]
@michaelmottcm Michael J. Kramer on x
So OpenAI is committing to a deal with Oracle worth more than the entire market cap of Cisco or Verizon.
@berber_jin1 Berber Jin on x
Scoop - OpenAI signed a giant $300 billion computing deal with Oracle, among the largest cloud deals ever Contract starts in 2027 and OpenAI will have to pay an average of $60bn a year over five years to make it work https://www.wsj.com/...
@jessefelder Jesse Felder on bluesky
‘OpenAI is generating roughly $10 billion in annual revenue - less than one-fifth of the $60 billion it will have to pay on average every year. Oracle will likely have to take on debt to buy the AI chips needed to power the data centers.’ www.wsj.com/business/ope...
@davelee.me Dave Lee on bluesky
“It will require 4.5 gigawatts of capacity, roughly comparable to the power produced by more than two Hoover Dams or the amount consumed by about four million homes.” www.wsj.com/business/ope...
@edzitron.com Ed Zitron on bluesky
*anybody* taking this seriously is a mark. This deal will mean OpenAI is paying $100bn+ in compute in 2029. To give you some scale, Microsoft's operating expenses for FY2025 were $153bn. It is utterly ridiculous and actively dangerous to retail investors to pretend this is rea…
@marypcbuk Mary Branscombe on bluesky
for years I've mocked Oracle for cloud regions most of us would call a broom closet; they finally got someone to pay for them to build something bigger [embedded post]
@kbsutt @kbsutt on bluesky
How is Oracle doing a deal with OpenAI of this magnitude? — THEY DON'T MAKE MONEY. — Yes, they have revenue, but obviously not enough. They're burning through billions each year. — Does Oracle think investors are going to pile on just for the privilege of paying Oracle $30…
@carnage4life Dare Obasanjo on bluesky
Oracle stock is up +50% this week based on half a trillion dollars in contracts to provide cloud AI services. — It turns out $300B of that will come from OpenAI. This is much higher than the $115B OpenAI told investors a few days ago that it will spend this decade. — Not sur…
@mwelsh1977 @mwelsh1977 on bluesky
Where is Open AI going to come up with 300 billion? They aren't even profitable.
@iphawk @iphawk on bluesky
Does OpenAI even have $300B to buy compute from Oracle? — Stock going to fade once people figure this out.
@peark.es George Pearkes on bluesky
Basically the massive guidance yesterday (light blue line in the chart, green is analyst consensus) was because ORCL finally quantified their relationship with OpenAI now that the ink is dry on that long-term partnership. [image]
@disappoptimism @disappoptimism on bluesky
And all of this is proper trickle down deflation crisis for the economy: — OpenAI buys into oracle - oracle buys into more real estate for data centres - pension funds and investment moves to create investment funds in data centres... Then one day the top goes pop and the casc…
@jessefelder Jesse Felder on bluesky
'Oracle's forecast highlights the need for global AI developers to keep accelerating their investments. OpenAI, an Oracle customer, estimates it will require trillions of dollars over time to spend on the infrastructure required to develop and run its services.' www.bloomberg.co…
@edzitron.com Ed Zitron on bluesky
This shit is really bad. The markets are on steroids. OpenAI is the largest customer here and OpenAI does not have the money to pay the bills. Other cloud providers will play this silly game too, lots of “a few years out” contracts that they have to revise. Ugly. [image]
r/WallStreetbetsELITE r on reddit
WSJ: Oracle, OpenAI Sign Massive $300 Billion Cloud Computing Deal
r/technology r on reddit
OpenAI, Oracle sign $300 billion computing deal, WSJ reports
r/singularity r on reddit
Oracle, OpenAI Sign $300B Cloud Deal; Twice previous estimates, now 66% of Oracle's future revenue
r/StockMarket r on reddit
Oracle, OpenAI Sign Massive $300 Billion Cloud Computing Deal
r/wallstreetbets r on reddit
Oracle, OpenAI Sign $300B Cloud Deal; Most of Oracle's new revenue will stem from its OpenAI deal, sources say

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