Oracle's $300 Bn Deal with OpenAI Positions India Ahead in Race for Computing Power India is positioned as the next logical geography for capacity expansion, leveraging abundant top-tier engineering talent and relatively lower-cost power corridors.
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OpenAI signed a contract with Oracle to purchase USD 300 billion in computing power over roughly five years, according to a report by The Wall Street Journal, citing people familiar with the matter.
According to The Wall Street Journal, the agreement will see Oracle supply OpenAI with roughly 4.5 gigawatts of computing capacity, an amount of power comparable to two Hoover Dams or enough to power around four million homes.
The agreement highlights how the race to lead in artificial intelligence (AI) is being driven by huge bets on infrastructure. For Oracle, this deal strengthens its position against Microsoft, Amazon and Google in the cloud market.
Analysts believe the reported Oracle-OpenAI deal significantly raises the stakes in the global AI landscape, positioning India as a central arena for the race in compute power, data sovereignty, and enterprise AI adoption.
"This move accelerates India's trajectory to become the world's largest market for frontier models from leading innovators like OpenAI and Google, fundamentally reshaping the dynamics of the global tech ecosystem. As the enterprise market prepares for widespread AI integration, India is poised to emerge not merely as a key battleground, but as the largest and most influential AI augmented innovator base," said Chirag Dekate, VP Analyst, Gartner.
With the US and Middle East campuses consuming much of Oracle's USD 300 billion backlog, India is positioned as the next logical geography for capacity expansion, leveraging abundant top-tier engineering talent and relatively lower-cost power corridors.
"We anticipate Andhra Pradesh, Tamil Nadu, Gujarat, and other states that are already courting hyperscale investments, to compete aggressively to host GW-scale AI factories, bundling renewables, tax breaks, and land grants. Oracle's USD 300 billion anchor deal will further intensify demand for AI infra engineers, power specialists, and AI engineering talent in India, powering new high-growth segments that focus on AI focused IT services. We are already seeing leaders like Cognizant, TCS, Wipro, Infosys, Mphasis, and several others accelerate AI centered transformation plans. We are also starting to see emergence of new disruptive AI focused innovators including True Foundry," Dekate added.
He further stated that rapid pace of acceleration of AI innovation will catalyze political and economic incentive for global leaders like Reliance, Adani, and state-backed entities to form Indian "Stargate" ventures, aiming to ring-fence capacity for domestic enterprises.
The scale of the deal is staggering compared to OpenAI's current business given that it generates around USD 10 billion in annual revenue, making the long-term commitment a major financial bet on the future of its technology.
For Oracle, the agreement is a game changer with shares of the company surging by nearly 43 per cent following the announcement, the biggest single-day gain since 1992. The stock jump added more than USD 100 billion to Chairman Larry Ellison's wealth, briefly pushing him past Elon Musk and Jeff Bezos in global rich lists.
In May this year, The Financial Times reported that Oracle will reportedly invest USD 40 billion on Nvidia's high-performance chips to power OpenAI's new US data centre. The data centre, situated in Abilene, Texas, is part of the US Stargate Project, led by top AI firms in the country, to boost America's heft in the artificial intelligence industry amid heating global competition.
Commenting on this, Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research, said OpenAI's decision to partner with Oracle represents "a conscious uncoupling from Microsoft's backend monopoly" that gives the AI company strategic flexibility as it scales.
"As AI models scale, so does infrastructure complexity—and vendor neutrality is becoming a resilience imperative," Gogia said. "This move gives OpenAI strategic optionality — mitigating the risks of co-dependence with Microsoft, particularly as both firms increasingly diverge in go-to-market strategies."
