OpenAI has secured a colossal lease agreement with Oracle, locking in 4.5 gigawatts of computing power annually to support its growing demand for AI infrastructure.
The deal, worth around $30 billion per year starting in 2028, is one of the largest cloud agreements ever made and signals a major scale-up of OpenAI’s Stargate project.
To deliver on the deal, Oracle will build a series of data centres across the United States, expanding on an already massive 1.2GW facility under construction in Abilene, Texas.
That site is expected to be upgraded to 2GW, according to people familiar with the project.
Potential new sites under consideration span several states, including Michigan, Wisconsin, Wyoming, New Mexico, Georgia, Ohio and Pennsylvania.
The Stargate venture, initially announced at the White House in January, is a collaboration between OpenAI, SoftBank, Oracle, Abu Dhabi’s sovereign wealth-backed MGX, and infrastructure developer Crusoe.
The group has already raised about $50 billion for the initiative, with a long-term goal of investing up to $500 billion to develop global AI infrastructure.
The 4.5GW energy commitment is staggering — it represents about 25% of the United States’ current operational data centre power.
To put it in perspective, a single gigawatt can power approximately 750,000 homes.
This level of energy consumption reflects the increasing scale required to train and run AI models like ChatGPT.
Oracle, traditionally known for its enterprise software, has been ramping up its cloud infrastructure business, positioning itself to compete with hyperscalers such as Amazon Web Services and Microsoft Azure.
Founder Larry Ellison has been vocal about Oracle’s ambitions, stating:
“We will build and operate more cloud infrastructure data centres than all of our cloud infrastructure competitors.”
The company’s annual revenue from its infrastructure business currently sits at $10.3 billion, making the $30 billion OpenAI deal nearly triple its current size.
Oracle’s stock price soared by as much as 3.9% following the news, hitting a record high and boosting investor confidence in the company's AI pivot.
To meet the compute requirements of the Abilene facility alone, Oracle plans to purchase approximately 400,000 Nvidia GB200 chips at a cost of about $40 billion.
These high-performance AI chips will form the backbone of the Stargate centre in Texas, which is being built in partnership with Crusoe.
While Microsoft remains OpenAI’s largest investor and maintains first refusal rights on new contracts, OpenAI has begun diversifying its cloud relationships.
In addition to the Oracle deal, the company has recently signed agreements with Google and CoreWeave following renegotiations with Microsoft earlier this year.
Beyond the US, OpenAI is helping develop a Stargate project in the UAE, working alongside Oracle, Nvidia, Cisco, Crusoe, and G42 — an AI firm supported by the Emirati sovereign wealth fund.
The scale of this deal reveals a stark truth: building advanced AI isn’t just a software challenge — it’s a power play in every sense.
With demand for AI compute skyrocketing, the race is no longer about who has the smartest algorithms, but who can command the most electricity, land, chips and partnerships.
As cloud giants pour tens of billions into AI infrastructure, one has to wonder — will access to power become the ultimate bottleneck in the global AI race?
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