OpenAI just made a big deal. It has signed on $300 billion with Oracle for computer power over the course of years. This is one of the largest technology deals, and it signals how quickly the AI demand is growing.
• Additional computer power to train and run advanced AI models.
• Global data centers for quicker load times for everyone using it.
• Space to grow with millions of people each day using AI.
Think of this as OpenAI renting the world's biggest engine for the next level of growth.
• Cost vs revenue - Currently, OpenAI has a revenue base in the range of $10 billion, and they are offering this deal for $300 billion. That's a lot of money in the gap.
• Profit - Analysts are saying we shouldn't expect any dividends from OpenAI until around 2029.
• Oracle on the hook - Oracle said they would build a great deal of infrastructure in a short time frame, which means spending on billions and billions.
So yes, both sides are going all-in on this.
This will obviously put full pressure on other tech giants such as Google, Amazon, and Microsoft to keep up, and the AI arms race heated up even further.
What are your thoughts? Is this a breakthrough AI needs or just another unnecessary tech deal? Regardless, it will change the AI game.
Why It Matters
Everyone realizes AI tools, like ChatGPT, consume tremendous server, energy, and cooling requirements. That is where Oracle fits nicely. With this deal OpenAI is getting:• Additional computer power to train and run advanced AI models.
• Global data centers for quicker load times for everyone using it.
• Space to grow with millions of people each day using AI.
Think of this as OpenAI renting the world's biggest engine for the next level of growth.
Project Stargate – The Bigger Picture
This deal is part of OpenAI’s more secretive plan called Project Stargate. The idea is to create enormous AI infrastructure with partners like Oracle and others. To give you an idea, they are looking for power at gigawatt scales—enough to power millions upon millions of homes. Pretty wild idea.What Are The Risks?
Big deals come with big risks. Here are a few:• Cost vs revenue - Currently, OpenAI has a revenue base in the range of $10 billion, and they are offering this deal for $300 billion. That's a lot of money in the gap.
• Profit - Analysts are saying we shouldn't expect any dividends from OpenAI until around 2029.
• Oracle on the hook - Oracle said they would build a great deal of infrastructure in a short time frame, which means spending on billions and billions.
So yes, both sides are going all-in on this.
What Does This Mean For Our Future
This has the ability to disrupt the entire AI race. OpenAI will have more control over their computing without becoming over-reliant on a partner like Microsoft. They will have the ability to release updates more quickly than before, get into more countries and scale quicker without delays from a partner coating issues around pricing and schedule.This will obviously put full pressure on other tech giants such as Google, Amazon, and Microsoft to keep up, and the AI arms race heated up even further.
My Opinion
I honestly believe that this signifies how serious AI has become. This isn't just about cool apps, or some novelty, it is about massive infrastructure, power, and money. Will this make tools like ChatGPT better and faster for us the end-users? I hope so.What are your thoughts? Is this a breakthrough AI needs or just another unnecessary tech deal? Regardless, it will change the AI game.