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OpenAI will pay Oracle $30 billion annually for data center services in an expanded partnership that dwarfs the artificial intelligence (AI) company’s current $10 billion yearly revenue, cementing one of the largest infrastructure deals in tech history.
The agreement, announced Tuesday, will develop 4.5 gigawatts of additional data center capacity across the United States. Oracle will supply over 2 million AI chips to power the facilities as part of OpenAI’s ambitious Stargate project.
OpenAI recently hit $10 billion in annual recurring revenue. The Oracle commitment alone represents three times that amount, excluding other operational expenses.
The massive scale becomes clear when considering power consumption. The 4.5 gigawatts equals the output of two Hoover Dams and could power approximately 3.4 million American homes.
Oracle began delivering Nvidia GB200 chip racks to the initial Stargate facility in Abilene, Texas, last month. Parts of that one-gigawatt site are now operational and running OpenAI’s training workloads.
“Abilene was that beta test to prove you could build these at scale and speed,” said Chris Lehane, OpenAI’s vice president of global policy.
Combined with the Texas facility, OpenAI expects to exceed 5 gigawatts of total capacity, running more than 2 million chips. The expansion advances their January commitment to invest $500 billion in 10 gigawatts of AI infrastructure over four years.
States, including Michigan, Wisconsin, and Wyoming, are under consideration for new sites, although specific locations remain undisclosed.
The deal creates complexity for the original Stargate partnership. While OpenAI announced the project with SoftBank and Oracle in January, SoftBank is not financing this expansion phase. Bloomberg reported the Japanese conglomerate faced financing difficulties amid economic uncertainty.
Oracle’s capital expenditure reflects the investment required. The company spent $21.2 billion last fiscal year and expects another $25 billion this year, primarily on data centers, CEO Safra Catz reported in June.
The partnership extends beyond simple capacity rental. OpenAI describes Stargate as encompassing all data center relationships, including separate arrangements with CoreWeave and Google cloud services.
Employment projections suggest significant job creation. OpenAI estimates the 4.5-gigawatt expansion will generate over 100,000 construction and operations positions nationwide.
Critics question funding sustainability. Tesla CEO Elon Musk dismissed the original Stargate announcement, saying, “they don’t actually have the money.”
The announcement comes as tech companies race to build AI infrastructure at unprecedented scales. Meta recently announced several multi-gigawatt data centers, including one scaling to 5 gigawatts.
President Donald Trump endorsed the Stargate initiative at the White House in January, emphasizing American competitiveness in artificial intelligence development against global rivals.
Oracle’s stock hit all-time highs following the deal disclosure, making founder Larry Ellison the world’s second-richest person according to Bloomberg rankings.
