Oracle in talks with Meta on $20B AI cloud deal

Oracle Corporation is reportedly negotiating a roughly $20 billion cloud computing agreement with Meta Platforms Inc.

People with knowledge of the matter said the deal would see Oracle provide Meta with infrastructure to build and roll out AI models over several years. They added that the agreement’s size could grow, with terms still under negotiation.

Shares of Oracle Corp. closed 4% higher Friday after reports of the deal surfaced. It rose to $308.66 in New York. If completed, the agreement would see Oracle supply Meta with massive computing firepower for training and deploying artificial intelligence models, to complement Meta’s existing cloud infrastructure capabilities.

Oracle’s stock has jumped over 80% in 2025

Oracle’s latest move follows its agreement to deliver 4.5 gigawatts of data center capacity for OpenAI, enough energy to power several hundred thousand homes per gigawatt. Shortly after the partnership was announced, the Wall Street Journal, citing sources, even reported that the project could be worth as much as $300 billion over five years.

Overall, the company’s stock has climbed more than 80% in 2025, lifted by surging AI infrastructure demand from customers, including OpenAI and Meta. The bulk of that rally followed last week’s earnings, where the company reported a 359% year-over-year jump in total remaining performance obligations, reaching $455 billion.

The figure represents more than a fourfold increase from last year’s level and is roughly four times larger than Google’s backlog. Bloomberg Intelligence even noted it could be a sign that Oracle’s cloud growth could soon outpace Google’s.

CEO Safra Catz had even commented, saying, “It was an astonishing quarter, and demand for Oracle cloud infrastructure continues to build.” 

She added that over the quarter, Oracle inked four multibillion-dollar contracts with three clients, and more deals are expected in the near future, setting the stage for obligations to climb above $500 billion.

Oracle took a while to decide on its cloud infrastructure strategy

According to Bloomberg, Oracle also provides computing power for Musk’s xAI via a Utah facility. It is also putting together tens of thousands of Nvidia chips in Singapore.

Moreover, the company faces commitments worth tens of billions to build massive data centers at a time of tight energy and materials supply. Insiders claimed the company will allocate over $1 billion annually to fuel gas generators at its West Texas data center rather than wait for a grid connection.

However, people familiar with the matter said Oracle’s resurgence was built on persuading CEO Safra Catz to prioritize cloud and sign major customers like TikTok, and the growing influence of forthright executive Clay Magouyrk. They noted that there had been extended friction around defining OCI’s role within the company. 

Reportedly, some executives viewed OCI as a tool to protect the core database business and update Oracle’s applications. In contrast, others pushed to take on Amazon and Microsoft in the broader cloud market, aiming for a share of an industry worth hundreds of billions annually. 

The effort to secure Catz’s support took time. Her concerns over cost and skepticism over the economics of cloud infrastructure drove OCI to start small. However, major customer wins such as TikTok and later OpenAI helped persuade her and other leadership to back a more aggressive strategy.

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