TLDRs;
- Meta is reportedly negotiating a $20B AI cloud deal with Oracle to expand its computing power.
- Oracle’s stock recently surged 43% following massive AI-focused contracts, including a $300B OpenAI deal.
- Meta seeks to diversify cloud providers while scaling AI training and deployment for its platforms.
- The deal underscores the booming demand for AI infrastructure and Oracle’s rising industry influence.
Meta Platforms Inc. is reportedly in advanced discussions with Oracle Corp. for a cloud computing agreement that could be worth as much as $20 billion, according to a source familiar with the matter.
The potential deal would make Oracle one of Meta’s major providers of computing capacity, enabling the social media giant to accelerate the training and deployment of its artificial intelligence (AI) models.
If finalized, the agreement would expand Meta’s roster of cloud partners, which already includes Amazon Web Services, Google Cloud, and Microsoft Azure. This would represent another significant step in the company’s strategy of diversifying cloud infrastructure while scaling its AI capabilities.
Oracle’s push into AI infrastructure
The talks come at a time when Oracle is aggressively positioning itself as a go-to provider for AI workloads. Just days ago, the company’s stock soared 43% in a single trading session, lifting its valuation close to the trillion-dollar mark.
The rally followed Oracle’s announcement of several multi-billion-dollar contracts, with the most high-profile being a reported $300 billion agreement with OpenAI over a five-year period.
Although Oracle controls only about 3% of the global cloud market, compared to Amazon’s 30%, its infrastructure is increasingly attractive for AI-specific workloads. Oracle’s legacy in database management appears to give it an unexpected advantage in managing the massive, compute-intensive demands of AI training.
Meta’s AI ambitions
For Meta, the deal would help strengthen its foundation in generative AI and large language models.
The company has been investing heavily in building AI tools for its social platforms, including Facebook, Instagram, and WhatsApp, while also developing open-source AI models through its LLaMA initiative.
Access to Oracle’s computing power could allow Meta to train models more efficiently and cost-effectively, while reducing its reliance on existing partners. This diversification also comes as competition heats up in the AI space, with rivals such as Microsoft, Google, and Amazon making their own billion-dollar commitments to AI infrastructure.
Industry-wide implications
The rumored $20 billion deal signals a broader shift in the cloud computing industry. Demand for AI computing has surged dramatically, with analysts estimating that AI-related cloud services are growing between 140% and 180% annually.
As companies like Meta, OpenAI, and ByteDance scale their AI operations, competition among cloud providers has intensified.
Oracle’s willingness to ink massive multi-year contracts highlights how specialized providers can win market share from established giants by focusing on AI workloads. CEO Safra Catz recently suggested Oracle could secure “several additional multi-billion-dollar customers” in the near term, a statement that now seems prescient.
Market reaction and outlook
Investors are closely watching whether the Meta-Oracle deal materializes. With Oracle’s valuation already boosted by AI optimism, confirmation of a $20 billion agreement could further strengthen its case as an emerging leader in AI infrastructure.
Meta, meanwhile, has not commented publicly on the matter, and Oracle has also declined to respond. If completed, the partnership would stand among the largest AI cloud agreements ever announced, cementing the role of cloud infrastructure as the backbone of the AI revolution.
