Meta Platforms is reportedly negotiating a multi‑year cloud contract with Oracle worth about $20 billion to secure computing power for large AI models. Analysts say the deal could significantly boost Oracle’s cloud revenue and accelerate Meta’s AI development.
Background
The AI arms race has led major tech companies to secure large amounts of cloud computing power to train and deploy advanced models. With rapid growth in generative AI, demand for dedicated infrastructure has surged and cloud providers are competing for long-term contracts.
Multiple media reports including Reuters say that Meta Platforms (parent of Facebook) and Oracle are negotiating a multi‑year cloud computing agreement valued at around $20 billion. According to Reuters, the deal would give Meta access to Oracle’s cloud infrastructure so it can train and deploy large AI models【529455312707967†L77-L87】. The contract is not yet finalised and could end up higher than the reported figure【680304603764967†L439-L446】. This would be one of the largest AI‑focused cloud contracts to date.
Deal Details
The multi‑year contract, if finalized, would likely be one of the largest AI‑focused cloud deals to date. Analysts say such a massive commitment could significantly boost Oracle’s cloud revenue and reinforce its position among hyperscale providers. Oracle’s share price surged after reports of the talks as investors bet the long‑term deal would drive steady recurring revenue and attract other AI clients【680304603764967†L439-L446】. The company has already won contracts to host AI workloads for OpenAI and xAI, and a partnership with Meta would further broaden its AI customer base
Impact on Oracle
Oracle stands to gain significant business from the proposed agreement. Analysts suggest that a $20 billion, multi‑year commitment would greatly increase the company's cloud revenue and cement its position among major infrastructure providers. Oracle's shares jumped after reports of the talks as investors anticipated a steady stream of AI‑driven demand【680304603764967†L439-L446】. The company already powers workloads for OpenAI and xAI, and adding Meta's large‑scale AI training needs would further diversify and grow its customer base.
Implications for MetaThe deal would give Meta access to additional cloud computing
Implications for Meta
capacity to train and deploy large AI models. Meta’s sprawling AI research and products—including generative models, recommendation systems, and ad targeting—require massive compute power. Partnering with Oracle would diversify Meta’s cloud infrastructure beyond its own data centers and provide flexibility as demand grows. Reports suggest the agreement is still being negotiated, and the final commitment could be higher than the reported figure; Meta may also continue to rely on other providers for critical workloads.
Market Reaction and Outlook
News of the negotiations boosted Oracle’s share price as investors anticipated a lucrative and long‑term revenue stream【680304603764967†L439-L446】. Analysts say a final agreement could intensify competition among cloud providers as they vie for generative AI workloads. For Meta, securing additional capacity may accelerate the rollout of AI‑powered products. However, the terms of the deal are still being discussed, and Meta is expected to continue using a mix of its own data centers and third‑party clouds. Whether or not the contract materialises, the talks underscore how demand for AI training capacity is reshaping the cloud market.
