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OpenAI’s $30 Billion Deal with Oracle Confirmed
OpenAI, the company that recently signed a $30 billion per year deal with Oracle for data center services, has confirmed the details of the contract. The deal was initially reported by The Wall Street Journal and has now been officially acknowledged by OpenAI CEO Sam Altman in a blog post.
The Scope of the Deal
According to OpenAI, the Oracle deal is part of the Stargate project, a $500 billion data center initiative announced in collaboration with Oracle and SoftBank. The contract involves 4.5 gigawatts of capacity, which is equivalent to the power output of two Hoover Dams and can supply energy to about four million homes.
Despite the significant financial implications of the deal, both Oracle and OpenAI will face substantial costs in building and maintaining the data center. Oracle has reported billions in capital expenditures for data centers in recent years, and the new project in Abilene, Texas will require a substantial investment in cash and energy.
Financial Impact and Future Outlook
For OpenAI, the Oracle deal represents a major financial commitment that significantly exceeds the company’s current revenue. With annual recurring revenue reaching $10 billion, the $30 billion deal with Oracle will triple the company’s income but also pose financial challenges in meeting the demands of the data center project.
