OpenAI’s massive spending is fueling growth across the U.S. tech sector, and Oracle has emerged as one of the main beneficiaries. The company reported record earnings this week, largely driven by OpenAI’s cloud computing commitments.
Oracle signed multiple multibillion-dollar contracts, including a key deal with OpenAI to provide 4.5 gigawatts of U.S. data center capacity. The contract is part of OpenAI’s plan to spend $300 billion on cloud computing over the next five years. This investment is helping Oracle expand its cloud backlog, which has surged to $455 billion, a 359% increase year-on-year.
OpenAI’s influence extends beyond Oracle. Broadcom shares jumped nearly 10% after announcing a $10 billion deal to build custom processors for OpenAI. Microsoft has invested over $13 billion in OpenAI and serves as its primary cloud partner. Nvidia also benefits, as its GPUs power OpenAI’s AI models.
These four companies — Oracle, Broadcom, Microsoft, and Nvidia — have seen combined market cap growth exceeding $4.5 trillion since OpenAI’s ChatGPT launch. Their gains have helped sustain sharp rallies in the Nasdaq and S&P 500. Analysts note, however, that OpenAI remains a cash-burning startup under a nonprofit parent. Investors are betting on the company’s ability to compete with Meta, Google, and other AI rivals.
Some experts express caution over Oracle’s reliance on a single customer. More than 90% of Oracle’s backlog stems from OpenAI, which could amplify risk if spending slows. Investors responded to this concentration, as Oracle’s stock fell after initial gains, despite hitting near-trillion-dollar valuation territory.
OpenAI continues large-scale commitments with other cloud providers, including CoreWeave and Google. The company also plans $19 billion toward the Stargate AI infrastructure project, a joint initiative with Oracle and SoftBank. These investments aim to support OpenAI’s rapid revenue growth, expected to rise from $10 billion in annual recurring revenue to $125 billion by 2029.
The company is also moving toward a commercial structure. Its nonprofit parent will retain oversight and hold more than $100 billion in equity as OpenAI transitions to a public benefit corporation. This restructuring allows the company to secure $40 billion from its latest financing round.
Oracle’s position in AI is improving but still faces competition. Industry analysts note that Oracle trails leaders like Amazon, Microsoft, and Google in cloud infrastructure. While the OpenAI deal gives the company a higher profile, it remains a “B-level hyperscaler” without dominant AI software or chip capabilities.
Overall, OpenAI’s spending is reshaping the U.S. tech industry. Oracle benefits from unprecedented cloud deals, but investors remain cautious about the long-term risks of concentrated customer reliance.
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