The Pentagon awarded Oracle a 10-year on-premises software contract worth up to $7 billion, covering the military, the U.S. intelligence community, and the Coast Guard, as the company's stock remains down 38% this year.
The Pentagon on Thursday announced a software contract with Oracle valued at up to $7 billion over a decade, a significant win for the technology company amid a difficult year for its stock.
The agreement covers the use of Oracle software in on-premises data centers across branches of the military, the U.S. intelligence community, and the Coast Guard, the Department of Defense said in a statement.
Kirsten Davies, the Defense Department's chief information officer, said the agency is saving at least $441 million for taxpayers "by fundamentally improving how we procure on-premises Oracle capabilities."
Oracle shares rose approximately 3% in extended trading following the announcement.
The contract comes as Oracle has faced sustained pressure from investors this year, with the company's stock down 38% in 2026. Analysts have grown concerned that the rapid expansion of artificial intelligence could erode growth prospects for legacy software vendors.
Oracle is simultaneously taking on tens of billions of dollars in debt to build out AI data centers, signaling a significant strategic pivot. Cloud revenue climbed 47% as the company works to supply AI computing capacity to OpenAI and other clients, though quarterly software revenue declined 2% year over year in its most recent report.
Oracle co-founder Larry Ellison has maintained a close relationship with the Trump administration. He was among the first guests to appear at the White House during President Donald Trump's second term, where he joined announcements around Stargate AI data center construction in the United States. Ellison reportedly contributed $45 million to a nonprofit backing Trump's 2024 presidential campaign.
Earlier this year, the Defense Department announced separate agreements with Oracle and other technology companies covering AI deployments in classified networks. Trump also supported Oracle taking a stake in TikTok's U.S. business.
The Pentagon contract reinforces Oracle's long-standing foothold in government computing. The Central Intelligence Agency was among Oracle's earliest enterprise customers, reflecting how deeply the company's database software is embedded in large institutional environments.
With Thursday's deal secured, attention will turn to whether Oracle can execute its dual strategy — maintaining its traditional software base while competing for AI infrastructure spending against cloud-native rivals — and whether the government business can offset investor concerns about the company's long-term trajectory.
TechEchelon Staff bylines are produced collectively by the newsroom for short, breaking, and wire-style coverage. Longer-form reporting is published under the responsible reporter's name.
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