Oracle(US:ORCL) Sou Hu Cai Jing·2025-10-09 08:18Core Insights - Oracle has signed a groundbreaking five-year cloud computing service agreement with OpenAI, involving a procurement of $300 billion in computing resources, which represents nearly 15% of the global cloud computing market and sets a record for the largest single contract in the industry [1][3] Group 1: Agreement Details - Oracle will build 4.5 GW of data center capacity for OpenAI, equipped with over 2 million NVIDIA H200/H250 GPUs, primarily located in energy-rich regions like Texas and New Mexico [3] - The computing power will support the training of OpenAI's next-generation GPT-6 model, expected to exceed 100 trillion parameters, marking a significant step towards artificial general intelligence (AGI) [3] Group 2: Market Reaction - Following the announcement, Oracle's stock surged by 36% on September 10, marking its largest single-day increase since 1992, with a market capitalization increase of $250 billion to $923 billion, briefly surpassing Tesla to become the third-largest tech company globally [4] - Larry Ellison's personal wealth increased by $89 billion, briefly making him the world's richest person, although he later lost this title as Tesla's stock rebounded [4] Group 3: Industry Dynamics - The signing of this mega-deal highlights the intense competition for computing resources in the global AI industry, with OpenAI facing a computing shortfall that is several times its current capacity [5] - Oracle's commitment to OpenAI secures a stable revenue stream of $60 billion per year for the next five years, significantly increasing its remaining performance obligations (RPO) from $98 billion to $455 billion, comparable to Saudi Arabia's annual GDP [5] Group 4: Financial Implications - Oracle is sacrificing short-term profits to secure this deal, with its cloud infrastructure business gross margin dropping from 67% to 16%, but the market is focusing on long-term growth potential, leading to a rise in its price-to-earnings ratio from 25 to 48 [5] - This strategy mirrors NVIDIA's investment of $100 billion in exchange for chip procurement orders, indicating a deep interconnection within the AI industry supply chain [5] Group 5: Future Outlook and Risks - The partnership is expected to accelerate the differentiation in the cloud computing market, with Oracle emerging as a strong player in AI infrastructure, projecting a 77% increase in cloud infrastructure revenue to $18 billion by fiscal year 2026, and exceeding $144 billion by 2030 [6] - However, there are risks associated with the massive order, as OpenAI must quintuple its annual revenue from $12 billion to $60 billion by 2027 to avoid potential default, while Oracle faces dependency on a single client, with OpenAI's order constituting 95% of its new RPO [6]