Oracle has signed a significant software contract with the Pentagon, valued at nearly $7 billion over ten years, benefiting various military branches.
The Pentagon announced a substantial contract with Oracle on Thursday, valued at nearly $7 billion over a decade. This contract is a significant triumph for Oracle, especially after facing challenges from investors this year, as evidenced by a 3% stock increase in after-hours trading.
Under the terms of the deal, Oracle’s software will be utilized in on-premises data centers for military branches, the U.S. intelligence community, and the Coast Guard. Interestingly, the Central Intelligence Agency was reported to be among the first customers of Oracle.
The contract features a five-year base period that includes various software licenses—both perpetual and subscription-based—alongside maintenance and consulting services. Kirsten Davies, the Department of Defense’s chief information officer, stated that the agency anticipates saving taxpayers a minimum of $441 million by improving the way it acquires on-premises capabilities from Oracle.
Earlier this week, Defense Secretary Pete Hegseth provided a distressing update regarding the financial implications of the ongoing conflict in Iran, which has reportedly cost the U.S. $37.5 billion since its onset in February.
Oracle co-founder Larry Ellison has historically supported President Donald Trump, reportedly donating $45 million to a nonprofit that backs Trump’s campaign for the 2024 presidential election. Ellison was also among the early guests at the White House during Trump’s second term, promoting initiatives such as Stargate, which is focused on establishing artificial intelligence data centers in the U.S. The former president had been a proponent of Oracle’s stake in TikTok’s U.S. operations, illustrating the intertwining of politics and business within the tech giant.
In May, the Defense Department announced various agreements with Oracle and other companies geared towards deploying AI technologies in classified networks, further solidifying Oracle’s role in governmental tech contracts.
Despite the recent success with this Pentagon contract, Oracle reported a 2% decline in quarterly software revenue compared to the previous year. However, the company’s cloud revenue displayed impressive growth of 47% as Oracle works to provide AI computing power to clients such as OpenAI.
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