OpenAI Doubles Down on "Billion Dollar Bet": Joining Forces with Oracle, Marrying Broadcom, Heavy Debt Burden for Gambling on "Stargate"

OpenAI's recent aggressive expansion in the field of artificial intelligence has attracted widespread attention. Following the announcement of a billion-dollar artificial intelligence chip development agreement with Broadcom Inc. (AVGO.US), the company has now revealed a five-year, 300 billion-dollar computing infrastructure procurement contract with Oracle Corporation (ORCL.US), further highlighting its unprecedented scale of capital investment and strategic ambitions. This series of billion-dollar collaborations is not only one of the largest cloud service contracts in the history of the technology industry, but also signifies OpenAI's unprecedented commitment to future computing power demands. The partnership with Oracle Corporation is part of the company's previously announced "Stargate" data center construction plan. This transaction is one of the largest cloud service contracts in history, far exceeding OpenAI's current revenue. It is reported that OpenAI and Oracle Corporation will build a 4.5 gigawatt data center computing capacity, which is roughly equivalent to the power output of two Hoover Dams or approximately the electricity consumption of about 4 million U.S. households. Preliminary signs of this transaction appeared in June, when Oracle Corporation disclosed in a regulatory filing that it had reached a cloud service agreement that would generate over 300 billion dollars in revenue in fiscal year 2027. With more data center infrastructure coming online, the revenue generated will increase annually. A month later, OpenAI publicly announced that it had agreed to purchase 4.5 gigawatts of computing capacity from Oracle Corporation, but did not disclose the specific scale of the contract at that time. Some may see potential risks in OpenAI's collaboration with Oracle Corporation. OpenAI has not yet achieved profitability and continues to incur losses. According to its June disclosure, its annual revenue is approximately 10 billion dollars, which is less than a fifth of its annual operating costs of 60 billion dollars, including building data centers and renting computing resources from other data center operators. At the same time, Oracle Corporation is staking a significant portion of its future revenue on just one customer. To meet the AI chip demands of its planned data centers, the company may need to take on debt. Compared to Microsoft Corporation, Amazon.com, Inc., and Meta, Oracle Corporation has a much heavier debt burden relative to its cash holdings. Its investment in artificial intelligence infrastructure has already exceeded its cash flow, with a total debt-to-equity ratio of 427%, compared to Microsoft Corporation's ratio of just 32%. OpenAI has embarked on multiple seemingly high-risk projects. Reports indicate that OpenAI is also collaborating with Broadcom Inc. to develop its own custom artificial intelligence chip, with the aim of creating a device that can rival Apple Inc.'s iPhone. This company, which has received billions of dollars in funding support, is consuming more resources than any startup in history. Last year, OpenAI's CEO told investors that he expects OpenAI to achieve profitability no earlier than 2029, and to reach that goal, the company may need to spend 440 billion dollars. Behind this series of aggressive moves is OpenAI's long-term bet on the growth potential of ChatGPT: betting that it can continue to attract billions of users and thousands of companies globally and maintain a leading position in fierce competition with rivals like Alphabet Inc. Class C, Anthropic, and others. However, as tensions with major investor Microsoft Corporation escalate and WINOX milestones are continuously delayed, OpenAI's expansion model based on large debts and partnership agreements is facing increasingly severe sustainability tests. Balancing strategic investments with financial risks while striving for technological leadership will be a key variable influencing the landscape of the artificial intelligence industry.