The Oracle logo. [Reuters]
The Oracle logo. [Reuters]

Oracle has signed a software contract with the US Department of Defense worth up to $6.99 billion, securing a major defense IT deal under the Trump administration — with founder Larry Ellison long regarded as a close ally of President Donald Trump.

Oracle announced Thursday that it had signed an Enterprise Software Agreement to supply on-premises software for the Defense Department's "Arsenal of Freedom" initiative.

The US Navy led negotiations for the contract, which carries a base term of five years and can be extended for an additional five years, bringing the total potential duration to a decade.

The contract is valued at $3.31 billion for the initial five-year period and rises to $6.99 billion if all extension options are exercised.

Under the agreement, Defense Department agencies, the Coast Guard and intelligence organizations will all be able to use Oracle's software on a shared basis.

The Pentagon expects the deal to cut costs and improve operational efficiency by consolidating IT procurement — previously handled through separate contracts by individual agencies — into a single agreement.

Kristin A. Davis, the Defense Department's chief information officer, said the contract would "provide taxpayers with a minimum of $441 million in cost savings while delivering faster and more effective services to warfighters."

Kim Lynch, Oracle's executive vice president for government, defense and intelligence, said the challenge for the Defense Department was "not just finding the right technology, but adopting it rapidly and at scale while maintaining compliance and minimizing complex procurement processes," adding that the contract would help address that.

The close relationship between Ellison and Trump has drawn renewed attention alongside the deal.

Ellison is a longtime Trump supporter, and US media have reported that he donated $45 million to a political action committee backing Trump during the 2024 presidential election.

Oracle shares fell 4.61 percent in regular trading Thursday but rebounded about 2 percent in after-hours trading following the contract announcement.

Meanwhile, the Pentagon is reshaping its defense IT infrastructure around large consolidated contracts — it signed a similar enterprise software agreement with Microsoft worth $9.69 billion in May.


sjy@heraldcorp.com