Oracle Corp. today announced a monumental cloud contract projected to contribute more than $30 billion in annual revenue, sending ripples through the tech industry and bolstering investor confidence. Following the disclosure, shares of the technology giant surged by nearly 9% at one point during trading, ultimately closing up 4% for the session.
The lucrative deal, detailed in a recent regulatory filing, is one of several significant cloud services agreements Oracle has secured since April 1, marking the commencement of its fiscal year 2026. Safra Catz, Oracle’s Chief Executive Officer, highlighted the company’s strong start to the new fiscal year in the document. “Oracle is off to a strong start in FY26,” Catz stated. “We signed multiple large cloud services agreements including one that is expected to contribute more than $30 billion in annual revenue starting in FY28.” While the specific values of the other contracts remain undisclosed, the flagship $30 billion-plus agreement stands out as a game-changer.
Crucially, Oracle has opted not to reveal the identity of the client behind this colossal contract. However, industry speculation heavily points towards OpenAI, the innovative developer behind ChatGPT. This hypothesis gains significant traction from the earlier partnership between OpenAI and Oracle on “Stargate,” an ambitious initiative aimed at constructing a vast network of artificial intelligence data centers across the United States. This monumental project is estimated to cost as much as $500 billion over the next four years, underscoring the scale of investment required for cutting-edge AI infrastructure.
The sheer magnitude of a $30 billion annual expenditure on cloud services immediately narrows the field of potential clients. Very few organizations possess the financial muscle to sustain such an investment. According to a report by The Information, OpenAI anticipates its annual revenue to reach an staggering $125 billion by 2029. Such a revenue stream would undoubtedly provide the necessary financial wherewithal to commit to a cloud services contract of this unprecedented size. It’s worth noting that other tech behemoths, such as Meta Platforms Inc. and Microsoft Corp., which also spend tens of billions annually on cloud infrastructure, typically opt to build and manage their own data centers, making Oracle’s new contract with a third-party even more remarkable.
Oracle has also refrained from disclosing the specific volume or type of cloud infrastructure it will provide under the new agreement. This lack of detail, coupled with the contract’s immense value, suggests a significant expansion of Oracle’s existing cloud capabilities may be necessary. For context, Oracle’s entire infrastructure cloud services and license support business generated $24.64 billion in revenue during fiscal year 2025 – a figure approximately $5 billion less than the projected annual revenue from this single new contract. This disparity strongly indicates that Oracle will need to substantially augment its cloud infrastructure to adequately meet the demands of the unnamed buyer, reinforcing the notion of a massive undertaking.
Further supporting the OpenAI connection, Oracle is already deeply involved in Project Stargate, specifically building a sprawling AI data center campus for the ChatGPT developer west of Dallas. This colossal site is planned to house ten facilities, reportedly equipped with an astounding $40 billion worth of Nvidia Corp. chips, vital for powering advanced AI computations. Earlier this year, Oracle also confirmed its commitment to constructing additional data centers for OpenAI in various other locations, demonstrating a growing, multifaceted partnership. This ongoing collaboration provides a strong foundation for the recent record-breaking contract.
To meet the surging demand for its cloud services, Oracle has been aggressively increasing its capital expenditures. The company’s capital spending tripled from $7 billion in fiscal year 2024 to over $21 billion last year. Earlier this month, Oracle executives communicated to investors that further increases in spending should be anticipated, underscoring a strategic commitment to expanding its cloud infrastructure. Larry Ellison, Oracle’s Founder and Chief Technology Officer, seemingly foreshadowed the $30 billion-plus contract when he recently mentioned that the company had received an order for “all available cloud capacity.” This statement now takes on profound significance in light of today’s announcement.
Looking ahead, Oracle projects that its cloud infrastructure revenue will experience more than 70% growth this year, a substantial increase from the 52% growth observed over the previous 12 months. This accelerated momentum is expected to play a crucial role in helping the company surpass its ambitious goal of generating $104 billion in total sales during its fiscal year 2029. The newly secured contract is a pivotal step in achieving this target, cementing Oracle’s position as a major player in the rapidly expanding cloud and AI infrastructure market.
