The U.S. Department of Defense awarded Oracle a contract worth up to $6.99 billion to provide software and services over the next decade.
The administration announced that the U.S. Department of Defense has awarded Oracle a consolidated software contract worth as much as $6.99 billion. The agreement covers a five-year base period with five additional option years, providing software, cloud services, and technical support to all military branches, the Coast Guard, and the U.S. intelligence community. Kirsten Davies, the Department of Defense's chief information officer, stated that the consolidated procurement system will save taxpayers at least $441 million by harmonizing technology and reducing fragmented purchasing. The deal includes perpetual and subscription-based licenses for on-premises data centers. While Oracle shares rose following the news, the company faces significant financial pressure. Oracle shares have dropped nearly 50% over the past year as the company spends billions on AI infrastructure, which has pushed free cash flow into the negative. Despite these challenges, cloud infrastructure revenue surged 93% in the most recent quarter. Oracle co-founder Larry Ellison, a supporter of President Trump, remains a key figure as the company manages its debt and seeks to maintain growth in the AI sector.