"OpenAI has signed an unprecedented $300 billion (€256 billion) contract with Oracle for computing power over five years. The deal, with a required capacity of 4.5 gigawatts, is one of the largest cloud contracts ever. Oracle's stock shot up by no less than 43 percent after the company announced in its quarterly figures that it had signed contracts worth $317 billion with three customers."
"The agreement starts in 2027 and runs for five years. For OpenAI, which currently has annual revenues of approximately $10 billion, the contract represents an average annual expenditure of $60 billion. The deal requires 4.5 gigawatts of power capacity, comparable to the consumption of approximately four million households. Oracle is thus concentrating a large part of its future revenue on a single customer. In addition, Oracle will likely have to take on debt for the necessary AI chips."
OpenAI will pay Oracle about $300 billion over five years starting in 2027 for cloud computing capacity totaling 4.5 gigawatts. The agreement implies average annual OpenAI spending of roughly $60 billion while OpenAI's current revenue is about $10 billion. Oracle announced $317 billion in contracts with three customers, sending its stock up 43 percent and increasing Larry Ellison's fortune by over $100 billion to nearly $400 billion. Oracle may take on debt to procure AI chips and is partnering with Crusoe on data center locations across Wyoming, Pennsylvania, Texas, Michigan and New Mexico. OpenAI faces compute shortages, reported $44 billion in losses, and expects profitability by 2029.
Read at Techzine Global
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