Can Oracle benefit from the $500 billion AI "Star Gate" project?

Oracle Corporation, a tech industry leader, could see its position become even more prominent in the coming years with the rise of artificial intelligence (AI). Its deep involvement in OpenAI's $50bn "Gateway" project gives it all the resources it needs to dominate the AI infrastructure sector. Oracle operates in three different areas, which are complementary and together fuel enthusiasm for AI architecture: cloud and licensing are the main revenue drivers. The hardware division provides the necessary computing pillars for the emerging AI revolution, supporting a variety of AI-driven workloads and enterprise needs. The services division ensures that businesses can effectively optimize and integrate these technologies, also providing information for the company's future strategic decisions. Analysts believe that, unlike Amazon's AWS and Microsoft's Azure, Oracle's focus on AI-optimized solutions gives it a major advantage in ongoing improvements and feature development. The "Gateway" project is a $50bn investment plan by OpenAI and SoftBank to develop cutting-edge data centers to build massive capacity and complexity for future AI workloads. Oracle's cloud infrastructure (OCI) will play a key role in handling OpenAI models' huge processing demands, delivering reliable revenue in a growing area. The first data center is being built in Texas. Oracle's strategy of optimizing small regional cloud centers is crucial to maintaining cost-of-ownership advantages relative to competitors. As AI applications continue to surge, the company's cloud services will grow further, delivering stable revenue growth. Oracle's revenue from its cloud infrastructure business soared 52 per cent year-on-year in the second quarter of 2025. The company expects the area to generate more than $25bn in revenue next year. In addition to private sector partnerships, Oracle has secured several classified government data contracts, opening up huge opportunities to work with clients such as the US Department of Defense and in other national security and healthcare areas. Moreover, Oracle is continuing to strengthen its balance sheet, significantly reducing its debt levels and steadily boosting the company's value. Despite the positive outlook, there are some risks: Oracle's cloud market share still lags far behind AWS; the cost of building infrastructure is huge, and the "Gateway" project's investment does not guarantee improved performance in the short term. Tech giants such as Google, Microsoft and Nvidia are all vying for market leadership in the AI sector, with richer resources and more flexible services that could pose a threat to Oracle. Wall Street's consensus rating for the company's stock is "Moderate Buy", with an average target price of $192.88/share.