Oracle wins 10-year Pentagon software contract worth up to $7 billion

The Pentagon announced Thursday that it had signed a contract. Seer It’s a big win for the software maker, valued at almost $7 billion in a decade, but it has been punished by investors this year. The stock rose nearly 3% in extended trading.

The contract covers the use of Oracle software in on-premises data centers for branches of the military, the U.S. intelligence community and the Coast Guard, according to the statement. The Central Intelligence Agency was Oracle’s first customer. According to the contract, the five-year base period includes perpetual and subscription-based software licenses, maintenance and consultancy. a statement.

Kirsten Davies, the Defense Department’s chief information officer, said in the statement that the agency saved taxpayers at least $441 million by “fundamentally improving the way we source in-house Oracle capabilities.”

Earlier this week, Defense Secretary Pete Hegseth estimated He said the cost of the war that started in Iran in February was 37.5 billion US dollars.

Oracle co-founder Larry Ellison is a long-time supporter of President Donald Trump. reportedly He contributed $45 million to a nonprofit supporting Trump’s 2024 presidential campaign.

Ellison was among the first guests to the White House during Trump’s second term and announced plans for Stargate AI data centers in the US. Trump supported Oracle taking a stake in TikTok’s US business, and in May the Department of Defense announced agreements We work with Oracle and other technology companies on AI deployments in private networks.

Still, Oracle shares have fallen 38% this year as investors worry that artificial intelligence could hurt the growth prospects of software companies. The company is also borrowing tens of billions of dollars to build AI data centers.

Oracle said in June that its quarterly software revenue fell 2% from a year earlier, even though the company’s database software is widely used at large companies. Cloud revenue rose 47% as the company pushes to provide AI computing power to OpenAI and other customers.

WRISTWATCH: Oracle reportedly facing cost overruns