OpenAI to Pay Oracle $300B for Data Center Capacity: Report

OpenAI plans to pay Oracle $300B for data center capacity. This deal comes after Oracle's earnings report, which caused its shares to spike by over 30%. The agreement will provide OpenAI with the necessary capacity to support its operations, further solidifying Oracle's position in the cloud computing market.

Oracle (ORCL) has secured a significant deal with OpenAI, agreeing to provide $300 billion worth of cloud computing power over five years, beginning in 2027. This substantial agreement follows Oracle's recent earnings report, which triggered a post-market selloff but also highlighted the company's robust cloud transition and undervalued valuation metrics.

Oracle's Q2 2025 earnings report revealed a 7% post-market selloff despite a 52% year-over-year (YoY) growth in cloud infrastructure revenue and a strategic partnership with Meta [1]. The company's earnings report showed $14.06 billion in revenue and an adjusted EPS of $1.47, narrowly missing consensus forecasts [3]. However, the stock's decline overlooked the accelerating growth of Oracle's cloud business, which hit $5.9 billion in Q2 2025, a 24% YoY increase [2].

The OpenAI deal is part of a broader $500 billion artificial intelligence infrastructure initiative, known as the Stargate project, involving OpenAI, Oracle, and Japanese investment group SoftBank [2]. This initiative will involve building data centers with a combined capacity of 4.5 gigawatts, further cementing Oracle's position in the cloud computing market [2].

The agreement underscores Oracle's growing relevance in the AI-driven cloud era. The company's strategic investments, including the acquisition of HashiCorp and the launch of the Oracle 23 AI database, position it as a leader in enterprise-grade AI infrastructure [1]. Furthermore, Oracle's cloud business is expected to grow at a 40%+ rate in FY2026, targeting $66 billion in total revenue [4].

While the deal signals a major win for Oracle, it also highlights the company's ability to attract large-scale clients seeking AI infrastructure. The $300 billion deal is one of the largest cloud computing agreements ever signed, reflecting the growing demand for AI computing power [2]. This demand is expected to drive Oracle's cloud market share growth, potentially reaching 3% by 2026 [4].

In conclusion, Oracle's earnings-driven dip has created a buying opportunity for investors who recognize the company's dual strengths: a resilient cloud business and a valuation that discounts growth at a time when demand for AI infrastructure is exploding. The OpenAI deal further solidifies Oracle's position in the cloud computing market, providing a compelling case for patient investors seeking long-term growth.

Sources:
[1] Oracle (ORCL) Q2 2025 earnings report [https://www.cnbc.com/2024/12/09/oracle-orcl-q2-earnings-report-2025.html]
[2] Is ORCL Stock a Buy, Sell or Hold at an EV/EBITDA Multiple of 21.89x [https://www.nasdaq.com/articles/orcl-stock-buy-sell-or-hold-ev-ebitda-multiple-2189x]
[3] Oracle: All Important Fundamental Metrics Say Buy [https://fastgraphs.com/blog/oracle-all-important-fundamental-metrics-say-buy/]
[4] Oracle Earnings Impress: Are Cloud Stocks a Buy? [https://www.zacks.com/commentary/2504430/oracle-earnings-impress-are-cloud-stocks-a-buy]