OpenAI has agreed to rent approximately 4.5 gigawatts of data center power from Oracle

OpenAI has just expanded its Stargate initiative with its agreement to rent an additional 4.5 gigawatts of data center power from Oracle Corp. in the United States. The scale and timing of the deal are just the latest exhibits to underscore the massive computational demands of advanced AI products. 

The agreement is part of the broader Stargate project, which is a $500 billion joint venture involving giants like OpenAI, Oracle, SoftBank, and Abu Dhabi’s MGX, with the aim of extensively leveling up AI infrastructure across the US.

The Stargate project continues to expand

News of OpenAI’s agreement to rent additional capacity from Oracle was revealed by sources familiar with the work who asked to be kept anonymous while discussing private information.

4.5 gigawatts is an unprecedented amount of energy. For context, one gigawatt is akin to the capacity from one nuclear reactor and has the potential to provide electricity to roughly 750,000 American homes. Now, all that power will go to Stargate, OpenAI’s project to buy computing power from Oracle for AI products.

As things stand, Oracle has already erected a massive data center in Abilene, Texas, for OpenAI alongside development partner, Crusoe. However, if it must meet the additional demand from OpenAI, the cloud infrastructure provider will need to develop multiple data centers across the US with partners, the sources said.

A productive day with @Sama and the @OpenAI team at the first Stargate site in Abilene, Texas pic.twitter.com/WmXnTGxnuz

— Oracle (@Oracle) May 7, 2025

Locations being considered for these sites include Texas, Michigan, Wisconsin, and Wyoming, in addition to expanding the Abilene site from its current power capacity of 1.2 gigawatts to about 2 gigawatts.

Other sites OpenAI is also considering include New Mexico, Georgia, Ohio, and Pennsylvania, one of the people claimed. The new projects also fall under the Stargate banner, but details of the plans have reportedly not been finalized.

Oracle’s core business is up in the green index

After the news broke, Oracle shares surged by as much as 3.9% to $227.46, a record high. The stock has jumped 36% so far this year, thanks to investor enthusiasm in its cloud business.

Oracle has been keeping busy. Before the announcement of expanding its Stargate initiative, earlier in the week, Oracle announced that it had signed a single cloud deal worth $30 billion in annual revenue, more than the current size of its entire cloud infrastructure business, beginning in fiscal 2028. However, it omitted the name of the customer.

The company, famous for its database software, has gained traction in the market for renting out computing power and storage over the internet. Adding clients focused on AI work as a target audience has helped it post a surge in revenue and expenses.

On Wednesday, credit ratings firm S&P highlighted how Oracle’s cloud infrastructure building spree was straining cash flow and how the current spending pace is higher than anticipated.

Still, it views Oracle’s cloud strategy favorably over the long term. Outside the US, it is also helping to develop a Stargate project in the United Arab Emirates with OpenAI,  Crusoe, Nvidia Corp, Cisco Systems Inc. and G42, an AI company backed by the country’s sovereign wealth fund.

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