Why OpenAI-SoftBank's $500B Stargate AI project is stalling
What's the story
The ambitious $500 billion Stargate project, announced by Japanese billionaire Masayoshi Son of SoftBank, OpenAI CEO Sam Altman, and President Donald Trump six months ago, is struggling to get off the ground. The newly formed company responsible for the project has not yet signed a single deal for a data center. This comes despite an initial commitment from both companies to invest $100 billion as part of their broader $500 billion plan by 2029.
Partnership disputes
Disagreements between SoftBank and OpenAI delay project
The delay in the Stargate project is due to disagreements between SoftBank and OpenAI over key partnership terms, including data center locations. The companies are now aiming for a more modest goal of building a small data center by year-end, likely in Ohio. This comes as a setback to Son's ambitions in the fast-evolving AI sector where he has been playing catch-up despite investing billions over the years.
Independent pursuits
Altman pursuing data center deals independently
Altman, eager to secure computing power for future iterations of ChatGPT, has been pursuing data center deals with other operators without SoftBank. Despite Stargate's slow start, both companies maintain that their joint effort is progressing well. They recently announced plans to build 10 gigawatts of data centers together and are working on projects across multiple states at "hyperscale and speed."
Strategic agreements
OpenAI strikes $30B data center deal with Oracle
OpenAI recently struck a data center deal with Oracle, committing to pay over $30 billion annually starting within three years. The agreement covers 4.5 gigawatts of capacity—enough power for four million homes—and includes facilities across the US. This deal alone gives OpenAI nearly as much capacity as Stargate promised for this year in January (5 gigawatts).