Pentagon signs 10-year software contract with Oracle worth up to $7 billion
The U.S. Department of Defense announced a 10-year contract with Oracle valued at up to $7 billion. The agreement covers on-premises software for various defense branches.
The Pentagon on Thursday announced a contract with Oracle worth nearly $7 billion over a decade, marking a significant agreement for the software maker.
The contract ensures the use of Oracle software in on-premises data centers for branches of the military, the intelligence community, and the Coast Guard. Department of Defense Chief Information Officer Kirsten Davies stated that the deal will save taxpayers at least $441 million by improving how on-premises Oracle capabilities are procured.
Oracle co-founder Larry Ellison has publicly supported President Donald Trump, reportedly contributing $45 million to a non-profit backing Trump's 2024 presidential campaign. Ellison was among the initial guests at the White House during Trump's second term, involved in plans for "Stargate" artificial intelligence data centers in the U.S.
Despite this contract, Oracle's stock has fallen 38% this year amid investor concerns that artificial intelligence could negatively impact the growth prospects of established software companies. The company is also accumulating tens of billions of dollars in debt to build out AI data centers.
In June, Oracle reported a 2% year-over-year decline in quarterly software revenue, although its database software is widely used by large corporations. Cloud revenue, however, climbed 47% as the company races to supply AI computing power to clients including OpenAI.