Oracle's Cloud Deal with Meta: A $65bn Boost to AI Infrastructure

Oracle's stock rose 3% after announcing a $65bn cloud service commitment with Meta, part of a wave of investments by tech giants in AI infrastructure. The deal is one of seven contracts signed with four clients, including Meta and Oracle claims an adjusted gross margin of 30-40% on AI infrastructure activities. Oracle expects AI-related revenue to reach $20bn by 2030.

Oracle Corporation's stock rose by 3% on Thursday following the announcement of a significant cloud-computing partnership with Meta. The deal, part of a broader wave of investments by tech giants in AI infrastructure, was made during Oracle's AI World conference in Las Vegas. The company expects its AI-related revenue to surge to $20 billion by fiscal 2030, up from $2.4 billion in fiscal 2025 and $3 billion in 2026, according to NewsArena.

The deal with Meta is one of seven contracts signed with four clients, including Meta and OpenAI. Oracle's executives emphasized that the company's cloud pipeline is expanding faster than expected, with global companies accelerating their AI investments. In just 30 days during the current quarter, Oracle contracted $65 billion in new cloud infrastructure commitments, according to Tekedia.

Oracle's partnership with Meta follows another major win earlier in the year when OpenAI committed more than $300 billion to Oracle Cloud Infrastructure (OCI). The deal positions Oracle as a key supplier to the artificial intelligence research company whose ChatGPT models have helped trigger the current AI investment wave, Tekedia reported.

The company's AI-driven database business is expected to grow nearly tenfold from $2.4 billion in fiscal 2025 to $20 billion by the end of the decade, marking one of the most aggressive long-term projections in the industry. Oracle's executives highlighted that the company's growth in AI infrastructure is built on sustainable financial terms rather than a pursuit of headline-grabbing contracts. Oracle's AI infrastructure carries an adjusted gross margin of 30% to 40% after factoring in the costs of land, data centers, power, and computing equipment, Tekedia added.

Oracle's approach of blending high-performance infrastructure with integrated database and analytics capabilities has started to distinguish it from competitors. The company is expanding its multi-cloud strategy by making its flagship database software available on other clouds, including Microsoft Azure and Amazon Web Services. This move allows customers to deploy AI workloads across different environments, improving flexibility and reducing vendor lock-in, according to Tekedia.

The company's bullish financial outlook for the coming years includes a target of $21 in adjusted earnings per share on $225 billion in revenue for fiscal 2030, representing a compound annual growth rate of 31%. Analysts polled by LSEG had projected significantly lower estimates of $18.92 per share on $198.39 billion in revenue, Tekedia reported.

The broader context for Oracle's momentum lies in the global AI boom that has redrawn the map of corporate investment priorities. Companies across sectors are racing to deploy AI models, analyze large datasets, and automate complex decision-making processes. This surge in AI adoption has transformed cloud infrastructure into one of the most sought-after assets in the technology world, driving record spending and competition among providers, Tekedia noted.