Oracle & OpenAI Expand Stargate for U.S. AI Data Centers
Oracle and OpenAI have expanded their Stargate partnership, announcing plans to build some of the largest AI data centers in the world across the United States.
There goal is to support OpenAI’s rapidly growing demand for compute power to train next-gen models like GPT-5 and beyond.
What is Stargate?
OpenAI and SoftBank have launched a new company called the Stargate Project to build infrastructure that supports the rapid growth of AI.
Announced in January 2025, Stargate plans to invest $500 billion by 2029 to develop data centers and related facilities across the U.S.
The project is backed by OpenAI, SoftBank, Oracle, and MGX (a tech investment fund from the UAE), who are providing the initial funding.
What’s New?
- OpenAI will lease up to 4.5 gigawatts of data capacity—an enormous number that could power millions of homes.
- The deal is estimated to bring Oracle over $30 billion per year by 2028, making it one of the largest cloud contracts in history.
- New and expanded U.S. data centers are planned in Texas, Ohio, Georgia, Wisconsin, Michigan, New Mexico, Pennsylvania, and Wyoming.
- Oracle will upgrade its Abilene, Texas site from 1.2 GW to nearly 2 GW, with 2.5 GW more coming from greenfield sites.
- The data centers will be custom-built for AI—optimized for GPU density, high-speed networking, and cooling.
Why It Matters
- OpenAI needs huge amounts of computing power to train and run its AI models.
- By working with Oracle (in addition to Microsoft Azure), OpenAI diversifies its cloud backend, reducing risks and costs.
- Oracle, in turn, positions itself as a top-tier player in AI infrastructure, directly competing with AWS and Microsoft.
Financial Boost for Oracle
- Oracle stock hit all-time highs after the announcement (per MSN).
- Analysts raised price targets; some called the deal a “blue sky scenario” for Oracle.
- Oracle plans to spend $25 billion on CapEx next year to build this AI-focused infrastructure.
- The company now has a cloud backlog of $150 billion, driven by AI demand.
News Gist
Oracle and OpenAI expanded their Stargate partnership with a $30B/year deal to build massive U.S. AI data centers.
The 4.5GW capacity will power OpenAI’s future models, boost Oracle’s cloud growth, and challenge AWS and Microsoft in AI infrastructure.
