Oracle (ORCL) CEO Clay Magouyrk, who was recently named co-leader of the technology company, says he’s confident AI company OpenAI (PC:OPAIQ) can afford the huge cloud computing bill it’s racking up. Specifically, at Oracle’s AI World conference, Magouyrk said CNBC that OpenAI can “of course” pay $60 billion for a year of cloud services. In fact, OpenAI and Oracle recently signed a five-year deal worth over $300 billion in July, which highlights how quickly OpenAI is growing, despite losing $5 billion in 2024.
Unsurprisingly, Magouyrk highlighted OpenAI’s success by saying it’s rare for a company to reach nearly a billion users so quickly. In fact, ChatGPT, OpenAI’s popular chatbot, launched less than three years ago and now has 800 million weekly active users. Separately, co-CEO Mike Sicilia said Oracle already uses OpenAI models in its healthcare software, particularly in patient portals linked to Cerner, which Oracle acquired for $28 billion in 2022.
It’s worth noting that to power its AI models, OpenAI leases Nvidia (NVDA) chips through Oracle while also working with CoreWeave (CRWV), Google (GOOGL), and Microsoft (MSFT). At the same time, OpenAI is building its own custom AI chip, which Broadcom (AVGO) will manufacture. Together, OpenAI and Broadcom plan to deploy 10 gigawatts worth of chip capacity, a massive infrastructure that will require a lot of power. However, Sicilia said getting enough power was only a matter of time.
As for Wall Street, analysts have a Moderate Buy consensus rating on ORCL stock based on 27 buys, eight holds and one sell assigned over the last three months, as shown in the chart below. Additionally, ORCL’s average price target of $346.45 per share implies 12.5% upside potential.
See more ORCL analyst notes
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