Oracle Cloud Infrastructure Aims for Skyrocketing Growth with Major AI Deal

Published Date : 27/09/2025 

Oracle's Oracle Cloud Infrastructure (OCI) has secured a $300 billion deal with OpenAI, positioning it to significantly increase its market share in the AI compute industry. 

Global spending on artificial intelligence (AI) is set to reach $1.5 trillion this year, according to estimates from Gartner. Even with the huge amount businesses and tech companies are already spending, that number is forecast to climb even further well into the future. The analysts at Gartner expect total spending to hit $2 trillion in 2026. Many analysts see total spending climbing through the end of the decade in order to take advantage of the massive opportunity and promises of generative AI.

One company managed to build a massive $10 billion business out of demand for artificial intelligence compute in just a few years, and it expects to capture a significant amount of market share over the next few years. In fact, management said it expects that $10 billion in annual sales to grow to $144 billion in sales within five years. And it has the contracts to back it up.

A handful of companies are rapidly building out data centers and leasing space and equipment in order to meet the demand of tech companies training and using large language models. Some contracts from companies like OpenAI and Anthropic, two leading LLM developers, are worth tens of billions of dollars per year. And the biggest cloud computing platforms — owned by Amazon, Microsoft, and Alphabet — are unable to keep up with the growing demand.

As AI companies look to diversify their compute providers, Oracle has emerged as a strong alternative with excellent networking capabilities and competitive pricing. However, its Oracle Cloud Infrastructure (OCI) is lacking in scale relative to the three market leaders. That didn't stop OpenAI from committing $300 billion to Oracle's cloud business over five years starting in 2027.

As a result, Oracle reported a huge increase in its backlog of remaining performance obligations. The amount stood at $455 billion as of the end of the company's first quarter, up from $137 billion at the end of the fourth quarter. While $300 billion of that is tied to OpenAI, Oracle added another $18 billion in contracts on top of that.

And management expects to sign additional contracts in the near future. It said OCI's remaining performance obligations will likely exceed $500 billion by the end of the current quarter. 

Frequently Asked Questions (FAQS): 

Q: What is Oracle Cloud Infrastructure (OCI)?

A: Oracle Cloud Infrastructure (OCI) is a cloud computing service provided by Oracle that offers a range of services including compute, storage, networking, and database services. It is designed to support various applications and workloads, including artificial intelligence and machine learning.

Q: Why is there a surge in demand for AI compute power?

A: The surge in demand for AI compute power is driven by the growing adoption of artificial intelligence and machine learning technologies across various industries. These technologies require significant computational resources to train and run complex models, leading to increased demand for cloud computing services.

Q: How much is the global spending on AI expected to grow by 2026?

A: According to Gartner, global spending on artificial intelligence is expected to reach $2 trillion by 2026, up from $1.5 trillion in 2023. This growth is driven by the increasing investment in AI technologies and their applications across different sectors.

Q: What is the significance of the contract between OpenAI and Oracle?

A: The contract between OpenAI and Oracle, worth $300 billion over five years, is significant because it positions Oracle as a major player in the AI compute market. This deal not only boosts Oracle's revenue but also helps it gain a larger market share in the highly competitive cloud computing industry.

Q: What are Oracle's expectations for its remaining performance obligations?

A: Oracle expects its remaining performance obligations to exceed $500 billion by the end of the current quarter. This is a significant increase from the $455 billion reported at the end of the first quarter, driven by the $300 billion contract with OpenAI and additional contracts signed with other clients. 

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