Oracle and OpenAI Seal a Monumental $300B Cloud Infrastructure Agreement
Oracle and OpenAI have inked one of the most colossal technology contracts ever, with OpenAI committing to a $300 billion purchase of cloud computing services over a span of five years, beginning in 2027. This gargantuan deal will endow OpenAI with 4.5 gigawatts of computing capacity, equivalent to the power consumption of 4 million U.S. homes.
The contract signifies a notable pivot in AI infrastructure strategy, as OpenAI diversifies from its conventional reliance on Microsoft Azure. Oracle’s stock experienced a 36% surge post-announcement, momentarily crowning CEO Larry Ellison as the world’s wealthiest individual. The agreement is a component of OpenAI’s wider Stargate project, which aspires to construct $500 billion worth of AI infrastructure across the United States.
Nonetheless, industry pundits have expressed apprehensions regarding OpenAI’s capability to fulfill the $60 billion annual commitment, considering the company’s current revenue of approximately $10-13 billion. Skeptics fear this could indicate an AI bubble, as OpenAI would need to drastically scale its revenue to meet these commitments.
Source: TechCrunch