OpenAI and SoftBank Slash Stargate AI Data Center Plans Amid Disputes

An ambitious, multi-billion-dollar joint venture between OpenAI and SoftBank to construct a fleet of advanced artificial intelligence data centers, known as Project Stargate, is scaling back its immediate plans.[1][2] The collaboration is now targeting the construction of a single, smaller data center by the end of 2025, likely to be located in Ohio, a significant recalibration from the project's initial, much grander vision.[1][3] This development comes amidst reports of disagreements between the two lead partners on essential aspects of the partnership, including the locations for the sprawling data center network they had planned to build across the United States.[1][4][3] Despite the downsized initial goal, both companies maintain they are moving forward with urgency on site assessments in multiple states.[1][3]

The Stargate project was unveiled with considerable fanfare, positioned as a critical initiative to secure American leadership in the field of artificial intelligence.[5][6] The venture, which also includes Oracle and the investment firm MGX as initial equity funders, announced a staggering plan to invest up to $500 billion in AI infrastructure in the U.S. by 2029.[5][7] An immediate deployment of $100 billion was committed to kickstart the project.[5][1] The initial vision included the construction of numerous large, AI-focused data centers, with as many as ten facilities planned for Texas alone.[4][6] This massive infrastructure build-out was intended to provide the immense computing power necessary to train and operate the next generations of OpenAI's advanced AI models.[6] The project also carried significant economic and political weight, with projections of creating over 100,000 jobs and bolstering U.S. national security.[5][1][6]

However, just six months after its high-profile launch, the project has encountered significant friction.[4][8] The core of the issue appears to be a lack of consensus between OpenAI and SoftBank, who are designated as the lead partners with operational and financial responsibility, respectively.[5][9] These disagreements have reportedly stalled progress, preventing the finalization of any data center deals under the joint venture.[4][8][10] The ambitious timeline has been impacted, with the initial goal of rapidly deploying $100 billion now replaced by the more modest target of a single, smaller facility.[9][2] The initial reports of construction already being underway in Texas now appear to be more complex, with suggestions that some of OpenAI’s data center activities in the state may be proceeding without SoftBank’s direct involvement.[1][11][12] This has led to some confusion, with the "Stargate" brand being used for data centers that are not part of the partnership with SoftBank.[8]

In a notable strategic pivot, OpenAI has not waited for the resolution of these partnership issues to secure its much-needed computing resources. The AI research and deployment company has independently negotiated significant data center agreements with other major technology players.[4] These deals, including a massive arrangement with Oracle and another with CoreWeave, are expected to provide OpenAI with a comparable level of computing capacity to what Stargate had initially promised for the near term.[4][9] This demonstrates OpenAI's relentless drive to acquire the infrastructure necessary for its research and development, even if it means circumventing its own flagship partnership.[9][11] These independent moves by OpenAI raise questions about the future scale and scope of the Stargate project as originally conceived with SoftBank as the primary financial backer.[9]

The current situation surrounding Project Stargate highlights the immense complexities and high stakes of building the foundational infrastructure for the future of artificial intelligence. The initial grand vision of a $500 billion network of data centers has been tempered by the practical realities of a multi-billion-dollar partnership, including strategic disagreements and logistical hurdles.[8][9][2] While OpenAI and SoftBank publicly state their continued commitment to the project, the focus has clearly shifted to a more incremental approach.[1][4][3] The AI industry will be closely watching whether the two giants can resolve their differences and realize the full, transformative potential of the Stargate initiative, or if OpenAI's independent pursuit of computing power will ultimately redefine the project's trajectory and the broader landscape of AI infrastructure development.[9][13]