Oracle signs a $30 billion cloud deal, further expanding its presence in AI infrastructure

Oracle has recently made a significant move in the AI infrastructure market, signing a cloud services agreement that is projected to add $30 billion annually to its revenue starting in fiscal year 2028. Although the customer behind this agreement has not been disclosed, analysts predict that it could potentially contribute up to a third of Oracle’s revenues in FY2028. This move is seen as a strategic step towards Oracle competing more effectively with major cloud providers such as Azure, AWS, and GCP.

Oracle has been actively pursuing advancements in AI and infrastructure, with their CEO Safra Catz discussing the significant growth in multi-cloud database revenue, which is expanding at a rate of over 100%. The company has also secured multiple substantial cloud services agreements, one of which is expected to generate more than $30 billion in annual revenue from FY28 onwards.

Industry analysts speculate that the unidentified customer involved in the $30 billion commitment could be a hyperscaler deal influencing the Asia region, potentially involving companies like ByteDance or OpenAI. Oracle Cloud Infrastructure (OCI) has been described as being on an “incredible trajectory” by experts from Moor Insights & Strategy, highlighting its impressive performance in terms of growth and revenue expectations.

In addition to its financial success, OCI boasts a remaining performance obligation (RPO) of $138 billion, marking a notable 41% increase year over year. This suggests that Oracle’s strategic investments in AI and data infrastructure are paying off, with the demand for cloud computing, particularly driven by AI models, playing a key role in pushing the company’s growth forward.

Originating as an enterprise resource planning (ERP) company, Oracle has expanded its horizons by introducing OCI in 2016 and focusing on enhancing its capabilities in the AI and data sectors. This move aligns with the broader trend in the tech industry where cloud providers are increasingly prioritizing AI infrastructure to meet the evolving needs of businesses and applications. Oracle’s substantial agreement reaffirms its commitment to strengthening its position within the competitive cloud landscape and signifies a major milestone in its strategic growth in the AI and infrastructure sectors.