The artificial intelligence evolution continues, with Sam Altman's OpenAI apparently offering a sizeable sum to store its technology for the future. As OpenAI goes head-to-head with Elon Musk's xAI and both try to bat off competition from China's DeepSeek, they're all being dwarfed by Nvidia's capabilities.
Nvidia has overtaken Apple to become the first company worth over $4 trillion, and as the artificial intelligence race heads into its next furlong, OpenAI continues to hold its own.
We already knew the American government had announced massive AI plans that would involve OpenAI teaming up with Oracle, and given that Larry Ellison is the world's second-richest man, it's quite the lucrative partnership.
Ellison is destined to see his impressive $289.7 billion net worth climb, as The Wall Street Journal confirms Oracle has just secured a $30 billion a year contract with OpenAI. A June 30 SEC filing confirmed Oracle had landed a cloud deal contract that would generate an additional $30 billion every year, although details on who it was with and what it involved were kept under wraps.
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In a company blog post, and posting on X, Altman was similarly quiet on the exact details. According to TWSJ, the Oracle deal is part of OpenAI's $500 billion Stargate project. It will involve Oracle providing 4.5 gigawatts of capacity, which is the equivalent of two Hoover Dams and is enough power for around four million homes.
While $30 billion a year isn't exactly pocket change, OpenAI and Oracle will still have to build the supersized data center.
The colossal construction is due to take place at the Stargate I site in Abilene, Texas.
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Importantly, the Oracle deal equates to nearly three times what OpenAI projected in annual revenue. TWSJ reminds us that OpenAI is said to be losing billions of dollars every year and is betting big on paying customers to boost its takings.
Elsewhere, Oracle CEO Safra Catz recently confirmed it has splashed $21.2 billion on capital expenditures in the last fiscal year. This is tipped to climb by another $25 billion by the end of 2025, meaning nearly $50 billion in two years. Most of this will be spent on data centers, although that princely sum doesn't include the price of land acquisition.
Still, it doesn't sound like Stargate is off to the best of starts. After pledging $100 billion 'immediately' back in January, it's been scaled back to a more modest goal of building a data center (possibly in Ohio).
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OpenAI has also shaken hands on a smaller deal with CoreWeave, having completed a data center for nearly as much capacity as Stargate promised. Crunching the numbers, $100 billion is around the same as 5 gigawatts of data centers.
It's not as simple as data centers just popping up, with the outlet noting you need to find a side and build the structure or employ another company to do it. There's also buying expensive AI chips and sourcing the massive amounts of electricity needed to power these centers. Stargate is apparently looking for a new low-cost design for Ohio, and as training better AI needs more electricity than ever, OpenAI is poised to spend more than ever before it even becomes profitable.
Added to this, Altman has warned it will take 'trillions' to reach the next stage of AI evolution.