OpenAI's 4.5 GW Lease From Oracle Fuels Stargate's $500 Billion Vision

OpenAI, the AI powerhouse backed by Microsoft Corp. MSFT, on Wednesday announced it has agreed to lease 4.5 gigawatts of computing power from Oracle Corp. ORCL under its Stargate initiative, Bloomberg reported on Thursday, citing unnamed sources familiar with the matter.

Oracle has committed $7 billion in the Stargate joint venture and plans to spend $25 billion in capital expenditure in 2026, well above prior estimates.

Coinciding with these developments, Oracle announced a single cloud deal worth $30 billion involving Stargate in annual revenue beginning in fiscal 2028 with an undisclosed customer, reportedly, OpenAI, the Financial Times cited unnamed sources familiar with the matter.

Also Read: Oracle’s AI Ambitions Take Flight After Record Cloud Growth: What Do Analysts Really Think?

Stargate, OpenAI’s project with partners including Oracle and SoftBank Group SFTBF SFTBY, proposed investing $500 billion to build data centres in the U.S. and globally.

It aims to establish expansive AI data centers across the U.S. and globally, fundamentally reshaping the computational infrastructure for advanced AI models.

On January 21, 2025, U.S. President Donald Trump formally announced the Stargate project. SoftBank’s CEO, Masayoshi Son, is the venture’s chairman.

The joint venture has raised about $50 billion from its founding partners, including Oracle and Abu Dhabi sovereign fund MGX.

Potential locations for the new data centre included Texas, Michigan, Wisconsin, Wyoming, New Mexico, Georgia, Ohio, and Pennsylvania. Oracle also plans to expand a 1.2GW Stargate facility in Abilene, Texas, with development partner Crusoe.

To support the computational needs of Stargate, Oracle is making substantial investments in hardware. It plans to purchase nearly 400,000 Nvidia Corp.’s NVDA GB200 chips for an estimated $40 billion to power its data center in Abilene, Texas.

Oracle stock surged 38% year-to-date, topping the S&P 500 and NASDAQ Composite indexes’ approximately 6% returns. The company stock price is trading close to its 52-week high of $231.90.

Wedbush Securities analyst Dan Ives, on June 18, named Oracle as one of the overlooked AI plays, comparing its current setup to Microsoft’s breakout in mid-2023. He expects institutional investors to rotate into Oracle as they catch up to the AI trade. Ives noted Oracle is now positioned as a key AI infrastructure player with a strong enterprise customer base.

ORCL Price Action: Oracle stock is trading higher by 0.63% to $231.42 premarket at last check Thursday.

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