OpenAI’s Stargate project may fail

The Stargate project, announced by US President Donald Trump in January and envisioning a $500 billion investment in artificial intelligence infrastructure, has failed to make the expected progress. Initially, the project was presented as a massive joint venture between tech giants OpenAI, SoftBank, Oracle, and MGX. However, over the past six months, the project appears to have evolved into a structure primarily formed by OpenAI and SoftBank. This contraction has led to a significant reduction in investment commitments.

Stargate Project Progressing Slower Than Expected

Following Trump’s announcement, OpenAI and SoftBank announced an initial $100 billion investment in Stargate. However, Elon Musk reacted strongly to this announcement, questioning the project’s financial viability, saying, “They don’t have that much money.”

This criticism appears to have been validated over time. Instead of the large investments OpenAI and SoftBank planned for 2025, they are only considering building a small data center in Ohio. No data center agreement has yet been officially signed under Stargate.

OpenAI is reportedly reluctant to build infrastructure at potential sites with SoftBank’s energy subsidiary, SB Energy. This stance suggests a weakening of the partnership between the two companies.

In contrast, OpenAI continues to use the Stargate brand on projects not involving SoftBank. The company is using this name for data centers planned for construction in Abilene and Denton, Texas.

OpenAI continues to make large-scale investments independently of SoftBank. The company signed a deal with Oracle to build a 4.5 GW data center. This agreement includes a total payment plan of $90 billion, commencing within three years.

OpenAI also signed a new agreement with CoreWeave, adding $4 billion to its existing $11.9 billion partnership. These investments demonstrate that OpenAI has reached the target amount set for Stargate alone by 2025. However, SoftBank is not directly involved in this process.

Although SoftBank owns the naming rights to the Stargate project, OpenAI continues to actively use the brand. This suggests disagreements regarding brand management between the two companies.

Despite this, both parties have publicly stated that they remain committed to Stargate. Recent statements have reiterated the goal of building 10 GW of data center capacity across the US. However, no concrete steps have been taken toward this goal to date.