OpenAI has agreed to lease computing power from Oracle Corporation’s data centers in the US as part of the Stargate initiative.

The AI company will rent additional capacity from Oracle totaling about 4.5 gigawatts of data center power in the US. This is enough energy to power millions of homes.

To meet the demand, Oracle plans to build several new data centers in Texas, Michigan, Wisconsin, Wyoming, New Mexico, Georgia, Ohio, and Pennsylvania.

Oracle’s existing data center in Abilene, Texas, will also expand from 1.2 gigawatts to 2 gigawatts.

OpenAI is also working on a Stargate project in the UAE with Oracle, Crusoe, Nvidia, Cisco Systems, and G42, an AI firm backed by the UAE’s sovereign wealth fund.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ AI’s unprecedented energy demands reshape the data center landscape

The 4.5 gigawatts that OpenAI is renting from Oracle represents a significant proportion of U.S. data center capacity, which totaled about 17 gigawatts nationwide as of March 20251.

This single deal accounts for a notable portion of U.S. data center capacity, highlighting the substantial resource requirements of advanced AI systems.

For perspective, data centers were projected to consume 130 gigawatts by 2030 (12% of total U.S. electricity demand), but massive deals like Stargate could accelerate this timeline1.

The scale reveals why companies are rushing to secure power capacity in advance, as existing infrastructure wasn’t built for AI’s computational demands.

This power consumption isn’t just a technical challenge but also an environmental one, with data centers currently emitting approximately 105 million metric tons of CO2 annually in the U.S. alone1.

2️⃣ Oracle’s cloud transformation showcases industry’s competitive realignment

Oracle’s $30 billion cloud deal (which includes this Stargate expansion) represents a significant strategic pivot for a company that was primarily known for database software.

The company’s cloud revenue reached $5.3 billion in 2024 with a 20% growth rate, and this new agreement could substantially increase that figure by 20282.

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