The contract with Oracle will require 4.5 gigawatts of power. Photo from xetechai.com
OpenAI has signed a contract to buy $300 billion in computing power from Oracle over about five years, one of the largest cloud contracts in history, reflecting how spending on AI data centers is reaching new highs despite growing concerns about a potential bubble.
This is reported by Delo.ua with reference to the Wall Street Journal .
The contract with Oracle will require 4.5 gigawatts of power, which is roughly equivalent to the electricity consumed by about 4 million homes.
Oracle shares jumped as much as 43% on Sept. 10 after the cloud company reported that it added $317 billion in revenue from future contracts during the most recent quarter, which ended Aug. 31. CEO Safra Katz told analysts that it signed contracts with three different customers during the quarter.
Meanwhile, Reuters notes that Oracle is soaring on the wave of AI cloud services. A 43% rise in shares to a record high has put the company on track to join the elite club of trillion-dollar corporations and lifted co-founder Larry Ellison closer to the top of the list of the world's richest people.
On Tuesday, September 9, the company announced four multi-billion dollar contracts amid a global trend led by companies like OpenAI and xAI that are aggressively investing in securing the massive computing power needed to lead the AI race.
The stock then rose 36.7% to a record high of $345.69, the biggest one-day percentage jump since 1992.
Ellison, whose fortune is largely based on his 41% stake in Oracle, briefly overtook Elon Musk to become the world's richest person after a record jump in the value of his assets. His fortune increased by $89 billion thanks to Oracle's quarterly report, which beat analysts' expectations and showed prospects for further growth. As a result, Ellison's total capital reached $383.2 billion, the largest single-day wealth gain in history. However, by the end of the day, Musk had regained the lead with a $1 billion lead.
If the stock's growth continues, Oracle's market capitalization will increase by about $234 billion to $913 billion, bringing the company closer to the coveted “trillion-dollar club.”
Oracle shares have risen 45% since the beginning of this year, outperforming the so-called “Big Seven” stocks and the broader S&P 500 index, as investors bet big on cloud companies developing AI.
“We expect to sign several more multi-billion dollar contracts in the next few months, and our RPO volume could exceed half a trillion dollars,” CEO Safra Katz said during a call after the publication of financial results.
Currently, the cloud computing market is dominated by Microsoft, Amazon Web Services, and Google Cloud with a combined share of 65%, while Oracle, Alibaba, CoreWeave, and others own a smaller share of the market.
