SoftBank and OpenAI’s ambitious $500 billion Stargate Project, announced in January, is being significantly scaled back following months of disagreements over its scope and strategy. Initially envisioned to reshape America’s AI infrastructure, the project aimed to build massive AI data centers nationwide, create over 100,000 jobs, and strengthen the country’s position in the global AI race against China.
However, six months after its launch, sources indicate that tensions between SoftBank CEO Masayoshi Son and OpenAI CEO Sam Altman over site locations, energy supply, and financial structures have stalled progress. As a result, the partners are now pivoting to a more modest goal: building a single large-scale data center in Ohio before the end of the year.
Why Was the Stargate Project Launched?
The Stargate Project was revealed in January, just one day after President Trump’s inauguration. It was promoted as a critical national investment to accelerate the U.S. lead in AI, secure economic benefits, and create high-value jobs. The initial pledge included an immediate $100 billion investment, with follow-up phases expected to reach $500 billion over four years.
According to OpenAI’s statement at the time, Stargate would help reindustrialize America by building world-leading AI computing infrastructure. Oracle, Arm, NVIDIA, Microsoft, and Abu Dhabi’s MGX fund were among the strategic and financial backers.
Project Hurdles: Location and Energy Supply Disputes
Key to Stargate’s success was the development of massive data centers powered by a mix of renewable and non-renewable sources through SB Energy, a SoftBank-backed energy company. Disagreements about the scale of the sites and the reliability of energy supply caused delays.
While SoftBank and OpenAI aligned on the vision, insiders report persistent clashes over operational decisions. SoftBank turned to Mizuho Bank for a $3 billion loan to adjust its funding plan as the original financing structure unraveled.
OpenAI and Oracle Move Ahead Independently
While Stargate stalled, OpenAI independently struck a $30 billion annual infrastructure deal with Oracle to rent 4.5 GW of data center capacity, boosting its AI training power to near the initial Stargate goal. OpenAI also signed additional capacity contracts with CoreWeave, bringing its total closer to 5 GW for 2025.
Oracle, meanwhile, is aggressively pushing its own AI data center strategy. Larry Ellison, Oracle’s co-founder and CTO, announced that the company is building a 1.2 GW Stargate data center in Abilene, Texas, using Crusoe’s technology and powered by approximately 400,000 NVIDIA GB200 chips.
The Bigger Picture: America’s AI Race with China
The Stargate Project is part of a broader geopolitical push by the U.S. to outpace China in advanced AI. Trump’s administration declared a national energy emergency on day one, cutting regulatory red tape for oil, gas, and mineral extraction vital to AI chip manufacturing. The project’s original sites spanned Texas, Michigan, Wisconsin, Wyoming, New Mexico, Georgia, Ohio, and Pennsylvania.
Despite the scale-back, OpenAI continues to deepen ties with key technology partners including Microsoft, NVIDIA, Cisco, and UAE’s G42 to build future computing capacity for AGI (artificial general intelligence) development.
What’s Next for Stargate?
SoftBank and OpenAI stress they are not abandoning the project entirely. The Ohio data center marks a scaled but strategic starting point. Site assessments for other states continue, but no clear timeline has been announced for additional large campuses.
The core mission—building world-class AI computing infrastructure in America—remains, but for now, the companies must rebuild trust and secure operational agreements to move beyond Ohio.
Quick Factsheet: Stargate Project
- Initial Budget: $500 billion over 4 years
- Launch Date: January 2025
- Lead Partners: SoftBank (financial), OpenAI (operational)
- Key Tech Partners: Oracle, NVIDIA, Microsoft, Arm, MGX Fund
- Planned Jobs: Over 100,000
- First Site: Ohio data center, operational by year-end
- Other Potential Sites: Texas, Michigan, Wisconsin, Wyoming, New Mexico, Georgia, Pennsylvania
- Key Suppliers: SB Energy, Crusoe, CoreWeave
- Main Goal: Build next-generation AI data centers to support AGI and maintain U.S. leadership in AI
- Geopolitical Context: Supports U.S. push to outpace China in AI and secure critical mineral supply chains
