OpenAI is currently securing hundreds of billions of dollars in commitments from major corporate partners for cloud computing resources. The company has transformed from relative obscurity to an industry giant valued at up to $830 billion within just over three years, according to its current fundraising round. It is now seeking $100 billion in fresh capital.
Microsoft and Oracle stand as two of OpenAI's most significant partners. Microsoft first invested in OpenAI in 2019, prior to ChatGPT's release, and now holds a 27% equity stake. The company has a $250 billion commitment from OpenAI for its Azure cloud platform.
OpenAI has also signed a separate five-year, $300 billion commitment with Oracle for its cloud infrastructure. Combined, these deals represent over half a trillion dollars in planned spending by OpenAI with just these two companies. The developer of large language models has additional commitments totaling roughly $800 billion with other cloud and chip providers.
OpenAI reported revenue of $4.3 billion for the first half of 2025. CEO Sam Altman stated the company reached a $20 billion annualized run rate in the last quarter. To cover spending that far exceeds current revenue, OpenAI has negotiated forms of vendor financing, including equity and stock warrants, with its partners.
Microsoft and Oracle are responsible for building the data center infrastructure to rent to OpenAI. This requires massive capital expenditures. Microsoft's capex reached $34.9 billion in its first fiscal quarter, with $11.1 billion from finance leases. Company management expects spending growth to accelerate this year to meet existing demand, including OpenAI's commitment.
Oracle's capital expenditures ballooned to $12 billion last quarter, tripling year-over-year. Microsoft generated $25 billion in free cash flow in its most recent quarter, funding its expansion from its high-margin software business and Azure's scale. Oracle, however, reported a $10 billion cash burn last quarter as it accelerated infrastructure build-out, funding the effort by raising long-term debt.
Oracle will likely see a significant decrease in its net profit margins due to interest on debt and large depreciation expenses. The company's approach introduces additional risk, compounded by immense customer concentration in OpenAI. If OpenAI reduces spending or fails, Oracle could be left with substantial unused computing capacity.
Investors are evaluating both stocks. Oracle trades at a forward price-to-earnings ratio of 28, a premium to the S&P 500. Microsoft trades at 29.5 times forward earnings. Analysts note Microsoft's more diversified customer base and its ability to fund AI data center expansion from existing software operations.