AI technology has been experiencing unprecedented growth since its debut in the past few years. OpenAI, the parent company of ChatGPT, has served millions of users with advanced tools that transform the way people create, learn, and work. However, currently, OpenAI needs energy to fuel its growth and more money to bring in energy.
Now, what’s new with OpenAI? According to some media firms, the company has allegedly entered into a $300 billion contract with Oracle to buy computing power for the next five years. However, this amount is yet to be confirmed.
$300 billion contract for huge megawatts of power?
Buying cloud computing power for $300 billion! This is one of the record cloud contracts ever signed. The amount even exceeds OpenAI’s annual revenue of $3.7 billion (in 2024). Additionally, the billion-dollar contract covers nearly 4.5 gigawatts of power capacity. As analysts find, the huge gigawatts are comparable to the electricity required to power roughly four million homes.
OpenAI urges for more computational power
With the $300 billion deal, OpenAI aims to add more power to operate its tools and engines. They face a major computing power shortage, affecting the speed of development models.
For Oracle, the contract indicates that a large part of its future revenue will rely on a single customer. As Oracle is committing to building massive gigawatts of data center capacity, it requires more debt to cover the cost. From thousands of AI chips to high-density compute infrastructure, the requirements needed for a proper infrastructure are extremely expensive.
Is OpenAI’s urge for more computational power risky?
Using a massive amount of electricity for training large models like GPT-5 can impact local power grids. Huge water consumption for cooling the AC, and electricity generation from water besides solar power, can also impact the environment.
The carbon footprint of AI is also exponentially climbing, raising concerns over a sustainable environment.
However, looking from OpenAI’s perspective, high computational power leads to better performance, and as we increasingly rely on AI, the demand for faster and smarter results continues to grow.
Oracle’s stock share grows
The billion-dollar deal led to a strong surge in Oracle’s stock, with shares jumping nearly 40% following the announcement.
In short, OpenAI’s urge for computational power is a high-reward, high-risk bet. The $300 billion cloud computing deal can bring superpower technology to speed up the operations and generate more content. If the expected growth or breakthrough does not happen, there is a high financial risk waiting for the platform.
