OpenAI and Softbank’s $500 Billion Data Center Project Is Already Stumbling

Stargate, the ambitious joint venture announced at the White House back in January between OpenAI, Oracle, the Japanese holding company Softbank, and others, appears to be struggling to deliver on its bold promises just six months later.

The Wall Street Journal reported today, citing unnamed sources, that the Stargate Project has yet to finalize any deals for new data centers. The report also says the group is scaling back its near-term goals.

When it was announced on Jan. 21, Stargate was pitched as a new company with plans to spend $500 billion over the next four years to build AI infrastructure across the U.S. OpenAI claimed in a post on X (formerly Twitter) that $100 billion of that would be deployed “immediately.” The company was named after the 1994 sci-fi film about an interstellar gateway. 

The post promised the new infrastructure would “secure American leadership in AI, create hundreds of thousands of American jobs, and generate massive economic benefit for the entire world.”

Initial backers of the company include OpenAI, Oracle, SoftBank, and MGX, with SoftBank and OpenAI leading the charge. SoftBank was said to be taking on the financial responsibility of the venture, while OpenAI handles operations. SoftBank’s CEO, Masayoshi Son, serves as the company’s chairman.

Son, OpenAI CEO Sam Altman, and Oracle co-founder Larry Ellison joined President Donald Trump at the White House for the first press conference of his new term to promote the venture. At the event, both Altman and Ellison said Stargate’s work could lead to cures for diseases like cancer.

Altman even declared that Stargate would be “the most important project of this era.” 

At the time of its announcement, Altman’s longtime rival, Elon Musk, immediately cast doubt on the project. Musk responded directly to OpenAI’s X statement, writing, “They don’t actually have the money,” and added, “SoftBank has well under $10B secured. I have that on good authority.”

The Wall Street Journal reported today that OpenAI and Softbank have not been able to agree on key issues regarding the partnership, including where to build the new sites. The group is now aiming to open a single, smaller data center, likely in Ohio, by the end of the year, according to sources familiar with the matter.

Despite the slow start for Stargate, Altman is pushing ahead with his own broader data center ambitions.

Just today, OpenAI said it’s partnering to develop 4.5 gigawatts of additional Stargate-branded data center capacity in the U.S., although the deal does not involve Softbank. 

Altman has been using the “Stargate” name for data center projects that fall outside the official SoftBank partnership, including facilities in Abilene and Denton, Texas, according to the Journal. Those particular sites are reportedly not being funded by SoftBank, even though the Japanese company holds the trademark for Stargate. 

In a press release announcing its new partnership with Oracle, OpenAI said, “With SoftBank, we’re moving quickly on site assessments and reimagining how data centers are designed to power advanced AI.”