TECH NEWS – The venture, which involves a lot of money, isn’t going as well as it should due to the disputes between OpenAI and SoftBank.
Stargate was intended to solidify America’s position at the forefront of the emerging field of AI, which is widely regarded as the defining technology of the 21st century. However, this massive undertaking, valued at approximately half a trillion dollars, has now become a casualty of the disputes between its primary backers, OpenAI and SoftBank. In January, Trump announced Stargate, a project requiring at least $500 billion to build the necessary AI infrastructure in the US over the next four years. Stargate was to involve several technology companies, including OpenAI, SoftBank, Oracle, and MGX, which were identified as the main hubs of the ambitious project. However, the project has become something of a duopoly, with OpenAI and SoftBank retaining primary control over Stargate’s management.
According to the Wall Street Journal, disagreements between the two companies appear to be causing the project to fall apart. In January, OpenAI and SoftBank pledged to invest $100 billion in Stargate immediately, sparking skepticism from Elon Musk, who stated outright that the Stargate participants don’t actually have the money. Six months later, SoftBank and OpenAI scaled back their joint investment targets significantly and agreed to build only a small data center in Ohio by the end of 2025. Thus far, the firm has failed to close a single data center deal under the Stargate umbrella.
OpenAI is reportedly reluctant to deploy Stargate’s infrastructure on sites linked to SB Energy, a SoftBank-backed energy developer. Although SoftBank owns the Stargate trademark, OpenAI has generously used the company’s prestigious label in projects with which SoftBank is not involved, such as the Abilene and Denton data centers in Texas. Interestingly, even without SoftBank, OpenAI is moving full steam ahead toward signing data center agreements. For example, the creator of GPT LLMs recently signed a 4.5 GW data center contract with Oracle, which will entail annual payments of $30 billion starting in about three years. (For comparison, Sam Altman, CEO of OpenAI, says 5 GW of data center capacity requires about $100 billion in investment.)
OpenAI has also signed a separate deal with CoreWeave that will add $4 billion to the existing $11.9 billion to use CoreWeave’s massive GPU pool. Notably, OpenAI has signed $100 billion worth of data center deals so far this year alone, which aligns with Stargate’s investment target for 2025. However, SoftBank is not explicitly included in these investments.
Officially, OpenAI and SoftBank remain committed to Stargate. The two companies recently stated that they will build 10 GW of data center capacity in the US in the coming years. However, there has been no concrete follow-up to these commitments.
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