OpenAI has agreed to lease significant computing resources from Oracle (ORCL, Financial) as part of its "Stargate" project, highlighting the immense demands of developing advanced AI products. Sources reveal that OpenAI will rent approximately 4.5 GW of data center power capacity from Oracle's U.S. facilities. Following this announcement, Oracle's stock rose by 5%, closing at a record high of $229.98, marking a 38% increase this year due to investor interest in its cloud business.
Earlier this week, Oracle announced a $30 billion single cloud service agreement effective from fiscal 2028, without disclosing the client's name. Insiders suggest the "Stargate" agreement is at least part of this contract. The Stargate project, launched in January at the White House, aims to invest $500 billion in AI infrastructure with partners including Oracle and SoftBank.
Oracle, alongside partner Crusoe, has already developed a large data center in Abilene, Texas, for OpenAI. To meet OpenAI's growing needs, Oracle plans to build multiple data centers across the U.S., considering sites in Texas, Michigan, Wisconsin, and Wyoming, while expanding the Abilene site's power capacity from 1.2 GW to 2 GW. OpenAI is also exploring locations in New Mexico, Georgia, Ohio, and Pennsylvania.
