OpenAI announces Stargate, a $500B project to build data centers
What's the story
OpenAI has announced a partnership with Japanese conglomerate SoftBank and tech giant Oracle to build several AI-focused data centers in the US. The effort, dubbed The Stargate Project, will start with a major data center in Texas and then expand to other states. Stargate will see an initial investment of $100 billion, with total investments going up to $500 billion over the next four years.
Economic impact
Stargate: A boost for US AI leadership and job creation
The Stargate Project is said to generate "hundreds of thousands" of jobs and bolster America's standing in the AI space. In a joint statement, OpenAI, Oracle, and SoftBank said, "This project will not only support the re-industrialization of the United States but also provide a strategic capability to protect the national security of America and its allies." The announcement was made at a White House press conference discussing plans to invest in US infrastructure.
Strategic partnerships
Tech giants and investment funds support Stargate Project
Microsoft, Arm, and NVIDIA are also tech partners in the Stargate Project. The Middle East AI fund MGX will join SoftBank in its investment; this will be MGX's first public deal after investing in OpenAI. The statement further clarified that "SoftBank and OpenAI are the lead partners for Stargate, with SoftBank having financial responsibility and OpenAI having operational responsibility."
Tech advancements
OpenAI's future plans for AI chip development
Reportedly, OpenAI is building a team of chip designers and engineers to possibly house its own chips in these data centers. The company is working with semiconductor firms Broadcom and TSMC on an AI chip for running models, which is expected to be ready by 2026. SoftBank had previously invested $500 million in OpenAI's last funding round and gave an additional $1.5 billion for staff share sales. Oracle already has an agreement with OpenAI to supply AI computing resources.
Growth strategy
Stargate Project's 1st site and future expansion plans
The Stargate Project's first site will be in Abilene, Texas, where OpenAI was once rumored to be in talks with Oracle for an entire data center. The facility could scale to nearly a gigawatt of electricity by mid-2026, enough to power some 750,000 small homes. OpenAI said "Stargate is evaluating potential sites across the country for more campuses as [it finalizes] definitive agreements." It's unclear how Stargate ties into a speculated $100 billion supercomputer project with Microsoft and OpenAI.