Oracle’s Market Value Skyrockets Following Monumental $300B OpenAI Cloud Contract
Oracle Corporation witnessed its most significant single-day gain since 1992, with its stock soaring by 36% to achieve a market valuation close to $933 billion. This dramatic increase came in the wake of an unprecedented $300 billion cloud computing contract with the artificial intelligence firm, OpenAI.
The five-year contract, set to commence in 2027, stands as one of the most substantial cloud contracts ever inked. This agreement momentarily propelled Oracle co-founder Larry Ellison to the status of the world’s wealthiest individual.
The contract is a key component of Oracle’s ambitious foray into AI infrastructure. The company forecasts that its cloud infrastructure revenue will multiply 14-fold by 2030, hitting $144 billion annually. However, the deal has not been without its critics.
Several analysts have voiced concerns regarding the deal’s concentration risk. A significant portion of Oracle’s $455 billion contract backlog is now linked to OpenAI. Despite generating $10 billion in annual recurring revenue, OpenAI continues to deplete billions in cash.
The partnership also encompasses the construction of new data centers, tailored specifically for AI workloads. This strategic move positions Oracle as a formidable contender in the rapidly expanding artificial intelligence infrastructure market, alongside established cloud behemoths like Amazon, Microsoft, and Google.
For more details, visit the original article: CNBC
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