OpenAI Signs $30 Billion Annual Contract with Oracle to Build 4.5GW-Class Data Center for Project Stargate
The "Stargate Project," announced at the White House this past January, is an AI infrastructure construction plan being deployed by OpenAI, Oracle, SoftBank, and others with an investment of up to $500 billion. Of particular note is the $30 billion annual data center contract between OpenAI and Oracle. In this article, we will organize the details of this contract and the trends of both companies (as well as SoftBank), and explain its significance and challenges.
1. What is the Stargate Project?
Stargate LLC is a joint venture established on January 21, 2025, by OpenAI, Oracle, SoftBank, and MGX. It is a grand project aiming for a $500 billion investment by 2030 to build multiple AI-dedicated data centers, primarily in the United States.
OpenAI and SoftBank are contributing 40% each, while Oracle and MGX are contributing 7% each.
In the initial phase, multiple centers are planned, including one in Abilene, Texas, with 10GW in the U.S. and future global expansion.
2. Details of the "Approximately $30 Billion Annual" Contract Between Oracle and OpenAI
2-1. Contract Overview
According to reports by TechCrunch, Oracle disclosed a "$30 billion annual cloud contract" in its SEC filing on June 30, 2025. The customer is OpenAI, and the contract involves commissioning 4.5GW of data center capacity to Oracle as part of the Stargate project.
4.5GW far exceeds typical data center capacity in the United States and requires power equivalent to two Hoover Dams, enough for about 4 million households.
2-2. Significance of the Contract
OpenAI is growing rapidly, with its latest products pushing annual revenue from $55 billion the previous year to the $100 billion range. This contract can be seen as a massive bet equivalent to three times that amount.
Oracle is positioning itself to compete with Amazon and Microsoft in the cloud infrastructure market, and its stock price jumped to an all-time high as a result of this contract.
3. Expansion Phase: From 4.5GW to Over 5GW
On July 22, 2025, further expansion by Oracle and OpenAI was reported.
An additional 4.5GW is planned for construction, bringing the total Stargate capacity to over 5GW.
This capacity is on a scale that would power over 2 million AI chips.
The government views this as part of strengthening U.S. infrastructure to address AI competition with China.
4. Challenges and Industry Concerns
4-1. Cost Burden and Risks
Oracle plans to invest $21.2 billion in CAPEX in fiscal year 2024 and $25 billion in fiscal year 2025, with an expected contribution of approximately $50 billion over the next two years.
As a result, while the stock price is on an upward trend, there may be a short-term decline of 2-3%. Concerns about "over-investment" have also emerged among investors.
4-2. SoftBank's Role and Stagnation in Progress
SoftBank originally planned to invest $19 billion, but delays in executing the contract are being observed.
Reports from sources like Bisnow suggest that OpenAI is proceeding with data center construction without SoftBank, alongside Oracle and CoreWeave, and there are indications that the initial Stargate concept has been revised.
Meanwhile, SoftBank continues to state that it has over 100 projects in progress and intends to reach its 10GW goal, but there are views questioning the pace of execution.
Conclusion
The $30 billion annual contract between OpenAI and Oracle is a bundle of risks and opportunities that is attracting significant attention, not only as an AI infrastructure strategy but also in the context of national economic and technological competition. Future execution speed, financial health, and coordination with SoftBank will be key, and the direction of the project is closely intertwined with the future of the entire industry.
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