Key points
- SoftBank and OpenAI disagree on data centre locations
- Initial $100 billion goal reduced to single Ohio site
- OpenAI signs major data deals without SoftBank
- Stargate not yet formally established
ISLAMABAD: A $500 billion initiative launched at the White House to boost the United States’ AI infrastructure has hit early roadblocks and significantly scaled down its initial targets.
Six months after Japanese billionaire Masayoshi Son stood alongside Sam Altman and President Trump to unveil the Stargate project, the venture has yet to finalise a single data centre deal, according to MSN.
Jointly led by Son’s SoftBank and Altman’s OpenAI, the partnership has struggled with disagreements over fundamental matters, such as where to build the centres. Although the original plan was to invest $100 billion immediately, efforts are now focused on a single, smaller data centre in Ohio by year’s end.
Building AI infrastructure
Despite the slow start, both companies insist the partnership remains strong. At a recent SoftBank event, Altman said the goal was to eventually build 10 gigawatts of capacity. A joint statement claimed the companies were progressing rapidly to build the necessary AI infrastructure across various states.
Still, tensions have emerged. OpenAI has pursued separate data centre deals without SoftBank, including a significant agreement with Oracle worth over $30 billion annually starting in three years.
That deal, covering 4.5 gigawatts of capacity, is equivalent to the power consumption of four million homes. Combined with a smaller deal with CoreWeave, OpenAI has nearly matched Stargate’s original 2024 capacity pledge on its own.
SoftBank, which invested $30 billion into OpenAI earlier this year—the largest-ever startup investment—has taken on new debt and sold assets to fund it.
AI data centres
Son remains optimistic and reportedly wants to increase his stake in OpenAI, despite past struggles to establish a dominant role in the AI sector.
The Stargate partnership, announced shortly after Trump’s return to office, involved pledges of $18 billion each from OpenAI and SoftBank to build and lease AI data centres.
Oracle and UAE-based MGX were also named as partners, but their involvement remains vague. Oracle CEO Safra Catz recently stated Stargate had not been officially formed.
Further friction has arisen over building on sites tied to SB Energy, a SoftBank energy affiliate. Meanwhile, Altman has referred to several OpenAI-only data centre projects as part of “Stargate”, even though SoftBank is not involved.
Building AI infrastructure is costly and complex. OpenAI’s commitments far exceed its current revenue, but it is betting on future growth from subscriptions and advertising to finance its ambitions.
