In a move underscoring the massive demands of advanced artificial intelligence products, OpenAI has agreed to lease a colossal amount of computing power from Oracle data centers in a deal estimated at 4.5 gigawatts of power.
Introduction: Energy on the scale of nuclear power plants
Sources with knowledge of the matter have revealed that artificial intelligence pioneer OpenAI has agreed to lease a massive additional amount of computing power from Oracle data centers as part of its ambitious initiative known as “Stargate.” This additional capacity amounts to approximately 4.5 gigawatts of data center power in the United States, an unprecedented amount of energy that could power millions of American homes. For comparison, a single gigawatt is roughly equivalent to the capacity of one nuclear reactor.
What is the Stargate project?
The Stargate project is a massive initiative announced by OpenAI in January at the White House, in collaboration with partners such as Oracle and SoftBank, aimed at investing $500 billion in artificial intelligence infrastructure. So far, Oracle has developed a massive data center in Abilene, Texas, for OpenAI. This new deal will significantly expand this project.
Deal details and impact on Oracle
To meet OpenAI’s additional demand, Oracle will develop multiple data centers across the United States in collaboration with other partners. Locations under consideration include states such as Texas, Michigan, Wisconsin, and Wyoming, in addition to expanding the existing Abilene site. Earlier this week, Oracle announced it had signed a single cloud deal worth $30 billion in annual revenue starting in fiscal year 2028, without naming the client. This Stargate agreement is believed to make up at least a large part of this announced contract.
This news pushed Oracle’s stock up by 5% to reach a record high, as investor enthusiasm for its cloud business grew. Oracle, known for its database software, has successfully gained traction in the computer power and online storage rental market, in part by targeting clients focused on artificial intelligence operations.
The AI infrastructure race
This massive deal underscores a fundamental reality in the era of artificial intelligence: developing advanced models requires vast amounts of energy and computing power. Intense demand from companies like OpenAI is driving cloud computing giants like Oracle into a frantic race to build new data centers and expand their capabilities. Although this expansion puts pressure on the company’s cash flow, as noted by S&P Global Ratings, it is viewed as a positive long-term strategy.
Global expansion of the Stargate project
Stargate’s ambition is not limited to the United States. In May, OpenAI announced it is helping develop the Stargate project in the United Arab Emirates in collaboration with Oracle, Crusoe, Nvidia, Cisco, and G42, a company backed by the country’s sovereign wealth fund. This indicates that the artificial intelligence infrastructure race is a global one, with nations and companies competing to secure the computing power necessary to lead the next technological wave.
Conclusion: Building the engines of the future
The expansion of the partnership between Oracle and OpenAI is more than just a business deal; it is tangible proof of the massive scale of infrastructure required to power the artificial intelligence revolution. These billions of dollars and gigawatts of energy are building the engines of the future, which will power everything from simple chatbots to complex scientific discoveries in the coming years.
