OpenAI has signed a cloud computing deal with Oracle Corp (NYSE:ORCL, ETR:ORC) worth $300 billion over approximately five years, starting in 2027, the Wall Street Journal reported on Wednesday.
The deal is part of the “Stargate” initiative to build large-scale AI data centers in the United States.
The contract is expected to generate roughly $30 billion annually for Oracle, the WSJ reported.
It involves a capacity of 4.5 gigawatts of power, roughly equal to the output of more than two Hoover Dams or the electricity used by about four million homes.
Oracle disclosed that it added $317 billion in future contract revenue during its fiscal quarter ending August 31, with OpenAI among the customers contributing to that figure, according to the report.
Oracle is expanding its data center capacity to support clients such as OpenAI, with capital expenditures expected to reach nearly $50 billion over the next two years.
The company’s traded almost 35% higher on Wednesday afternoon, significantly increasing the market value of the company and boosting the wealth of chairman Larry Ellison.