Meta & Oracle Negotiates $20 Billion Cloud Contract

Oracle, a major player in enterprise software, and Meta, a social media giant, are negotiating a multi-year cloud contract worth over $20 billion, according to a person with knowledge of the situation told Reuters on Friday. The possible agreement demonstrates Meta’s efforts to acquire more processing power to back up its AI initiatives.

Oracle would give Meta cloud infrastructure to train and implement AI models under the agreements under discussion. As Meta increases its investments in generative AI and machine learning capabilities, this would expand its list of current cloud providers. Oracle and Meta have not made any public statements regarding the discussions.

The announcement was made just one week after it was reported that OpenAI and Oracle had inked one of the biggest cloud partnerships ever, with a five-year contract worth almost $300 billion in computing capacity.

A 1GW data centre campus and a massive 5GW facility are currently being developed by Meta, which has long constructed its own data centre infrastructure. The company estimates that capital expenditures will increase “significantly” in 2026, from $66 billion to $72 billion in 2025.

However, the company has also been a major cloud client and wholesaler of leases.

In 2021, Meta announced that it would broaden its collaboration with Amazon Web Services to leverage the platform for AI research and development as well as acquisitions. 

It has been claimed that the corporation reached a $10 billion, six-year contract with Google Cloud this August.

Mark Zuckerberg, the CEO of Meta, has promised to put “hundreds of billions of dollars into compute” in the company’s endeavour to “build superintelligence.”

Oracle, on the other hand, has benefited greatly from the AI boom and has secured several well-known cloud contracts. Notably, it was revealed earlier this month that OpenAI intended to pay over $300 billion over five years for Oracle services, which is probably the biggest cloud contract ever.

In addition to Temu and xAI deals, the company manages TikTok’s US cloud services and is attempting to acquire the business.

Once renowned for its databases, Oracle has been re-establishing itself as a major player in the cloud space, going up against Google Cloud, Microsoft Azure, and Amazon Web Services. Revenues have increased by more than sixteen times in the previous quarter alone because to the company’s relationships with big companies that enable clients to run Oracle Cloud Infrastructure (OCI) alongside local services.

Oracle revealed four more multibillion-dollar contracts last week, highlighting the spike in demand for computer power as companies like OpenAI, Meta, and Elon Musk’s xAI invest billions in AI research. With more significant clients anticipated to join in the near future, the business also predicted that booked revenue at its OCI segment might surpass half a trillion dollars in the upcoming years.

If approved, the Meta deal would further solidify the growing competition for processing power throughout the world and represent another significant step in Oracle’s evolution into a vital provider of AI infrastructure.