From left, President Donald Trump, Oracle’s Larry Ellison, SoftBank’s Masayoshi Son, and OpenAI’s Sam Altman appear at the White House in Washington on January 21, 2025.
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The Department of Defense announced the contract Thursday. oracle It’s worth about $7 billion over 10 years, a big win for the software maker, which has been punished by investors this year. Shares rose about 3% in extended trading.
The deal includes the use of Oracle software in on-premises data centers for the military, U.S. intelligence agencies and the Coast Guard, according to a statement. The Central Intelligence Agency was Oracle’s first customer. According to one account, the base term of the agreement is five years and includes perpetual and subscription-based software licenses, maintenance, and consulting.
Kirsten Davies, the Pentagon’s chief information officer, said in a release that the Pentagon is saving at least $441 million for taxpayers “by fundamentally improving the way we procure on-premises Oracle capabilities.”
Earlier this week, Secretary of Defense Pete Hegseth estimated that the war with Iran, which began in February, cost the United States $37.5 billion.
Oracle co-founder Larry Ellison is a longtime supporter of President Donald Trump and reportedly donated $45 million to nonprofits supporting Trump’s 2024 presidential campaign.
Ellison was one of the first guests to appear at the White House during President Trump’s second term, announcing plans to build an artificial intelligence data center called Stargate in the United States. Trump supported Oracle’s investment in TikTok’s U.S. operations, and in May the Pentagon announced an agreement with Oracle and other tech companies to bring AI to sensitive networks.
Still, Oracle’s stock has fallen 38% this year as investors grow concerned that AI could hurt the growth prospects of established software companies. The company is also taking on tens of billions of dollars in debt to build out its AI data centers.
In June, Oracle announced that its software revenue for the quarter was down 2% from a year earlier, even though its database software is widely used within large enterprises. Cloud revenue rose 47% as the company rushed to supply AI computing power to OpenAI and other customers.
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