The Pentagon and Oracle announced a massive software consolidation deal late Thursday, worth up to $6.9 billion over the next 10 years, covering the entire Defense Department, Coast Guard and intelligence community.
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The agreement, Pentagon officials said, will help advance the broader “Arsenal of Freedom” initiative, which is the Trump administration’s push to remake the American defense industrial base and dramatically speed up production of munitions and other crucial warfighting capabilities.
By unifying all information technology purchases into one contract, officials said, the administration said it will also save taxpayers at least $441 million over the life of the contract.
“This nearly $7 billion agreement with Oracle strengthens our digital ecosystem, supporting our warfighters with secure, scalable technology to dominate current and future missions,” Kirsten A. Davies, the Pentagon’s chief information officer, said in a statement.
The deal includes an initial five-year base period. The Pentagon could extend the agreement for another five years, bringing the contract’s total value to nearly $7 billion.
The agreement covers Oracle software used at data centers and other military sites globally. The Department of the Navy negotiated the deal, but it will cover the entire U.S. military as well as U.S. intelligence agencies.
Oracle said its Enterprise Software Initiative deal with the Pentagon will speed up the procurement process.
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Under the deal, military departments, agencies, offices and their private-sector contractors “can expedite the procurement of Oracle commercial products and services,” the company said in a press release.
“ESI is designed to address those challenges by creating a more standardized and efficient path to Oracle cloud and AI technology tuned to support mission-critical scenarios,” said Kim Lynch, the company’s executive vice president for government, defense and intelligence.
The deal comes at a crucial moment for Oracle, which reportedly saw its stock price drop by about 37% so far this year. It also comes at a politically delicate time for the company’s co-founder and longtime CEO, Larry Ellison, widely viewed as a close ally of President Trump.
The Ellison family controls the media giant Paramount, which is trying to buy Warner Bros. Discovery in a potential deal worth more than $110 billion. That agreement will ultimately require approval from the Justice Department.
A federal judge earlier this week paused that agreement until Aug. 17. Twelve states are suing to block the deal.
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