The U.S. Department of Defense has awarded Oracle a contract valued at nearly $7 billion over ten years, covering the use of Oracle software in on-premises data centers across military branches, the U.S. intelligence community, and the Coast Guard. Oracle shares rose approximately 3% in extended trading following the announcement.
The contract includes a five-year base period encompassing perpetual and subscription-based software licenses, maintenance, and consulting services. The CIA was identified as Oracle’s first customer under the arrangement. Department of Defense Chief Information Officer Kirsten Davies said the contract structure would save taxpayers at least $441 million by improving how the agency procures on-premises Oracle capabilities.
The award represents a significant win for Oracle at a difficult moment for the company. Its stock has fallen approximately 38% in 2026, reflecting investor concern that AI could erode growth prospects for traditional enterprise software vendors. The company has also taken on tens of billions of dollars in debt to fund AI data center expansion. Oracle reported a 2% year-over-year decline in quarterly software revenue in June, though cloud revenue climbed 47% as the company scales capacity for clients including OpenAI.
The Pentagon deal follows a May announcement in which the Defense Department reached agreements with Oracle and other technology companies around AI deployments in classified networks. Oracle co-founder Larry Ellison has maintained close ties to the current administration, appearing at the White House during Trump’s second term to announce plans for Stargate AI data centers. Trump also backed Oracle’s pursuit of a stake in TikTok’s U.S. business.
The new contract adds a stable, long-term revenue stream to Oracle’s government business as the company navigates a challenging transition in the broader enterprise software market.
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