OpenAI Strikes Record Deals for AI Expansion
OpenAI has reportedly committed to two of the largest infrastructure agreements in tech history: a $300 billion, five-year cloud contract with Oracle, beginning in 2027, and a $10 billion chip order with Broadcom. The deals highlight the massive capital demands of scaling artificial intelligence.
The AI pioneer, valued at $300 billion after a $40 billion fundraising round, plans to reach a $500 billion valuation following a $6 billion stock sale. Despite generating about $10 billion in annual revenue, OpenAI is bracing for $60 billion in yearly expenses and does not expect profitability until 2029.
CEO Sam Altman is pursuing rapid expansion, targeting over 1 million GPUs online by year-end and advancing the $500 billion Stargate project, which includes a giant new data center in India. The news lifted markets: Oracle shares surged 40%, briefly making Larry Ellison the world’s richest man, while Broadcom gained 5% after confirming the chip deal.
