OpenAI has announced that it will work with Japanese conglomerate SoftBank, Oracle and others to build multiple AI data centers in the U.S. The joint venture called the Stargate Project will start with a large project in Texas, and then expand to other states. The companies plan to invest $100 billion in Stargate at first, and up to $500 billion over the next four-year period. OpenAI, Oracle and SoftBank released a joint statement in which they said that the Stargate Project was a new company that would [build] a new AI infrastructure in the United States for OpenAI. This project will not only help re-industrialize the United States, but also provide a capability to protect national security for America and its allies. SoftBank CEO Masayoshi Son was in attendance, as well as OpenAI CEO Sam Altman and Oracle cofounder Larry Ellison. Microsoft is also a tech partner in Stargate. Arm and Nvidia are also involved. Middle East AI Fund MGX will be joining SoftBank’s investment. MGX made its first public deal (19459056) by investing in OpenAI. SoftBank, OpenAI and Oracle are listed as “initial investors” in Stargate.
The statement continued, “SoftBank and OpenAI will be the lead partners in Stargate. SoftBank will have financial responsibility for Stargate and OpenAI will have operational responsibility.” “Masayoshi son will be the chairman. [of Stargate]… As part of Stargate Oracle, Nvidia and OpenAI will collaborate closely to build and run this computing system.” The company is said be building out a team with chip designers and engineers and working with semiconductor companies Broadcom and TSMC in order to create an AI processor for running models which could arrive as early as 2026. SoftBank has reportedly invested $500 million in OpenAI’s last round of funding and another $1.5 billion in order to allow OpenAI employees to sell shares through a tender offer. Oracle has a dealto supply AI computing resource with OpenAI.
SoftBank had also pledged to invest 100 billion dollars in the U.S. within the next four-year period. Son and Trump have been working closely together since 2016, when Son announced that SoftBank was investing $50 billion in U.S. startup companies and creating 50,000 jobs.
The Information reported earlier that OpenAI was in negotiations with Oracle to lease a whole data center in Abilene Texas. This data center could produce nearly a gigawatt by mid-2026. A gigawatt of electricity is enough to power approximately 750,000 small homes. Crusoe Energy, a data center startup, was said to have been involved in the project. It was estimated to cost $3.4 billion.
The Abilene site is Stargate’s initial site. OpenAI states that Stargate “is evaluating potential sites across [it finalizes] the country for additional campuses as[it finalizes]final agreements.” TechCrunch contacted OpenAI to get more information.
The Information reported last year that Microsoft and OpenAI were building a series data centers for AI in five stages, over several years. The final facility, Stargate, is a 5-gigawatt facility covering several hundred acres. The Information reported that Stargate would take between five and six year to complete. Microsoft had reportedly planned a smaller data center for OpenAI in the years leading up to its completion.
Several tech leaders have called on the U.S. government to increase its investment in data centres, especially as the AI industry continues growing at an explosive rate. AI systems require massive server banks to run and develop at scale. Goldman Sachs estimates that AI will account for 19% of the data center power by 2028. OpenAI has blamed the lack of compute capacity for delaying their products. According to reports this has become a source tension between Microsoft, OpenAI’s close collaborator and major shareholder.
Microsoft recently announced that it will spend $80 billion to build AI data centers. In a blog post the company said that its success depends on new partnerships based on large-scale investments in infrastructure. Altman, in an interview with Bloomberg said that it was urgent to remove what he perceived as barriers to building more data center infrastructure in America. Altman said, “I agree with [President Trump] that it’s crazy how difficult it is to build things in America.” “Power plants, Data Centers, or any of that sort of stuff.” I understand the bureaucratic cruft that builds up but it is not helpful to our country as a whole.
Massive projects like data centers have vocal critics, who claim they often create fewer jobs and have severe environmental effects. Data centers are often water-hungry, putting a strain on areas with limited water resources. Their high power requirements have also forced some utilities to rely heavily on fossil fuels. These concerns don’t seem to be slowing down investments. According to a McKinseyreport, capital expenditures on mechanical and electrical systems in data centers could exceed $250 billion over the next five years.
Trump announced in January that Hussain Sajwani[an Emirati billionaire who founded DAMAC Properties]would invest $20 billion into new data centers throughout the U.S. Industry experts have expressed skepticism about the dealhowever.
