OpenAI's Massive Data Center Expansion: Project Stargate Accelerates

Why does OpenAI need six giant data centers?

On Tuesday, OpenAI, Oracle, and SoftBank announced plans for five new US AI data center sites for Stargate, their joint AI infrastructure project, bringing the platform to nearly 7 gigawatts of planned capacity and over $400 billion in investment over the next three years. The massive buildout aims to handle ChatGPT's 700 million weekly users and train future AI models, although critics question whether the investment structure can sustain itself. The companies said the expansion puts them on track to secure the full $500 billion, 10-gigawatt commitment they announced in January by the end of 2025. The five new sites will include three locations developed through an OpenAI and Oracle partnership: Shackelford County, Texas; Doña Ana County, New Mexico; and an unspecified Midwest location. These sites, along with a 600-megawatt expansion near the flagship Stargate site in Abilene, Texas, can deliver over 5.5 gigawatts of capacity, which means the computers on site will be able to draw up to 5.5 billion watts of electricity when running at full load. The companies expect the sites to create over 25,000 onsite jobs. Two of the sites will be developed through a partnership between SoftBank and OpenAI. One site in Lordstown, Ohio, where SoftBank has broken ground, is on track to be operational next year. The second site in Milam County, Texas, will be developed with SB Energy, a SoftBank Group company. These two sites may scale to 1.5 gigawatts over the next 18 months. The new sites will join the flagship Stargate campus in Abilene, Texas. Oracle began delivering Nvidia hardware to that site in June, and OpenAI has already begun training (building new models) and inference (running ChatGPT) using the data center. Here's a rundown of those announced Stargate sites so far:

OpenAI is building five new Stargate data centers with Oracle and SoftBank | TechCrunch

OpenAI announced on Tuesday that it plans to build five new AI data centers across the United States with partners Oracle and SoftBank through its Stargate project. The new data centers will bring Stargate's planned capacity to seven gigawatts -- enough energy to power more than five million homes. Three of the new sites are being developed with Oracle. They're located in Shackelford County, Texas; Doña Ana County, New Mexico; and an undisclosed location in the Midwest. The other two sites are being developed with SoftBank, with one in Lordstown, Ohio and the other in Milam County, Texas. The new Stargate AI data centers are part of OpenAI's massive infrastructure buildout, as the company works to train and serve more powerful AI models. On Monday, OpenAI said it would receive a $100 billion investment from Nvidia to buy the chipmaker's AI processors and build out even more AI data centers.

OpenAI Teams Up With Oracle and SoftBank to Build 5 New Stargate Data Centers

The new sites will boost Stargate's planned capacity to nearly 7 gigawatts -- about equal to the output of seven large nuclear reactors. OpenAI is planning to build five new data centers in the United States as part of the Stargate initiative, the company announced on Tuesday. The sites, which are being developed in partnership with Oracle and SoftBank, bring Stargate's current planned capacity to nearly 7 gigawatts -- roughly the same amount of power as seven large-scale nuclear reactors. "AI is different from the internet in a lot of ways, but one of them is just how much infrastructure it takes," OpenAI CEO Sam Altman said during a press briefing in Abilene, Texas on Tuesday. He argued that the US "cannot fall behind on this" and the "innovative spirit" of Texas provides a model for how to scale "bigger, faster, cheaper, better." Three of the new sites, in Shackelford County, Texas, Doña Ana County, New Mexico, and a yet-to-be disclosed location in the Midwest, are being developed in partnership with Oracle. The move follows an agreement Oracle and OpenAI announced in July to develop up to 4.5 gigawatts of US data center capacity on top of what the two companies are already building at the first Stargate facility in Abilene. OpenAI claims the new data centers, along with a planned 600 megawatt expansion of the Abilene site, will create more than 25,000 onsite jobs, though the number of workers required to build data centers typically dwarfs the amount needed to maintain them afterwards. The two remaining sites are being helmed by OpenAI and SB Energy, a SoftBank subsidiary that develops solar and battery projects. These are located in Lordstown, Ohio and Milam County, Texas. Stargate is one of several major US technology infrastructure projects that have been announced since President Donald Trump took office at the start of the year. OpenAI said in January that the $500 billion, 10 gigawatt commitment between the ChatGPT maker, SoftBank, Oracle and MGX would "secure American leadership in AI" and "create hundreds of thousands of American jobs." Trump touted the mammoth initiative just two days after he returned to the White House, promising that it would accelerate American progress in artificial intelligence and help the US compete against China and other nations. In July, Trump announced an AI action plan that called for speedy infrastructure development and limited red tape as the US tries to beat other countries in the quest for advanced AI. "We believe we're in an AI race," White House AI czar David Sacks said at the time. "We want the United States to win that race." OpenAI initially framed Stargate as a "new company" that would be chaired by Softbank CEO Masayoshi Son. Now, however, executives close to the project say it's an umbrella brand name used to refer to all of OpenAI's data center projects -- except those developed in partnership with Microsoft. The flagship site in Abilene is primarily owned and operated by Oracle, with OpenAI acting as the primary tenant, according to executives close to the project. The buildout, which is being managed by the data center startup Crusoe, is on track to be completed by mid 2026, sources close to the project say. It is already running on Oracle Cloud Infrastructure and supporting OpenAI training and inference workloads, those sources add.

OpenAI Says It'll Build Five More Huge Data Centers. Here's Where

Expertise Artificial intelligence, home energy, heating and cooling, home technology. OpenAI's push to build more data centers to fuel its generative artificial intelligence tools like ChatGPT reached a frenetic pace this week with plans that, if realized, could mean hundreds of billions of dollars in investment. Alongside the cloud computing company Oracle and the Japanese investment firm SoftBank, OpenAI said it would stand up five new data center sites in Texas, New Mexico, Ohio and a yet-to-be-announced location in the Midwest. It's the latest announcement in what's been dubbed the Stargate project, a massive infrastructure undertaking to scale up OpenAI's ability to build and operate AI models. OpenAI already has a site in Abilene, Texas, and other projects with the computing provider CoreWeave are already under development. The whole Stargate project is expected to include 10 gigawatts of computing power and cost $500 billion. This week's announcements bring the project to almost 7 gigawatts of capacity and more than $400 billion in the next three years. "AI can only fulfill its promise if we build the compute to power it," OpenAI CEO Sam Altman said in a statement. "That compute is the key to ensuring everyone can benefit from AI and to unlocking future breakthroughs. We're already making historic progress toward that goal through Stargate and moving quickly not just to meet its initial commitment, but to lay the foundation for what comes next." (Disclosure: Ziff Davis, CNET's parent company, in April filed a lawsuit against OpenAI, alleging it infringed Ziff Davis copyrights in training and operating its AI systems.) The push for more and better AI has driven the tech industry's incredible thirst for computing power in recent years, and data centers have become a hot commodity. The raw materials of AI are more than just the chips made by Nvidia and its competitors. Data centers take up large expanses of land, drink up vast quantities of water to cool those computers and rely on astronomical amounts of electricity to operate them all. Not everyone is happy about this growth. Some communities have pushed back, banning data centers or putting serious curbs on them. Don't miss any of our unbiased tech content and lab-based reviews. Add CNET as a preferred Google source. Altman and other tech executives are optimistic that more computing power will mean smarter models that can do things like, maybe, cure cancer. In a post on his personal blog this week, Altman said his vision is for a "factory that can produce a gigawatt of new AI infrastructure every week," which would represent exponential growth for the data center industry. Whether all of that data center development happens, of course, is still an open question. Financing can be fickle, permitting is difficult enough that President Trump made it a centerpiece of his AI Action Plan, and the AI business changes fast.

OpenAI accelerates Project Stargate with 5 new AI data centers across the US

Data centers require massive quantities of water for cooling. OpenAI is pushing forward with its mission to power increasingly large AI models with the construction of five new data centers across the US, the company announced Tuesday. Also: How Nvidia and OpenAI's staggering $100 billion deal could fuel a new age of AI The announcement of the new data centers marks the latest development in Project Stargate, the AI infrastructure plan OpenAI launched(?) in January alongside the Trump administration, Oracle, SoftBank, and Emirati investment firm MGX. The project secured $500 billion in funding to build data centers over the next four years that will cumulatively generate 10 gigawatts of power -- enough to fuel roughly 7,500,000 homes for one year. The five new data centers -- which will be built, respectively, in Shackelford County, Texas; Dona Ana County, New Mexico; Lordstown, Ohio; Milam County, Texas; and an undisclosed location in the Midwest -- will provide 7 gigawatts of power to be put toward OpenAI's proprietary AI models. According to OpenAI, that number keeps Stargate "ahead of schedule" to get to 10 gigawatts by the end of 2025. "Together, these sites are expected to create over 25,000 onsite jobs, and tens of thousands of additional jobs across the US," OpenAI wrote in its announcement, adding that it's still evaluating additional sites across the country. US chipmaker Nvidia announced on Monday that it would invest up to $100 billion in OpenAI for the construction of more data centers. Also: Will AI damage human creativity? Most Americans say yes (Disclosure: Ziff Davis, ZDNET's parent company, filed an April 2025 lawsuit against OpenAI, alleging it infringed Ziff Davis copyrights in training and operating its AI systems.) As tech companies' ambitions amid the ongoing AI boom have escalated, so too have their energy bills. Also: Worried about AI's soaring energy needs? Avoiding chatbots won't help - but 3 things could It takes a lot of energy to train and run AI models. Developers have been locked in a race with China to stay ahead of AI development, which means building massive local data centers filled with graphics processing units (GPUs) to power AI tools like ChatGPT and Gemini and develop more advanced models. That race has transformed US chipmaker Nvidia into the wealthiest company on the planet. It also has major environmental implications. Data centers are prone to overheating, which means they require huge quantities of water for cooling. On top of that, they're often constructed in arid Western states, which have abundant land but are also prone to seasonal droughts. Many data centers are powered by fossil fuels, exacerbating global greenhouse effect and climate change. Microsoft announced plans last September to reopen Three Mile Island, the nuclear power plant and the site of the infamous partial reactor meltdown in 1979, to power its own AI ambitions. Also: These consumer-facing industries are the fastest adopters of AI agents OpenAI CEO Sam Altman and other AI industry leaders tend to justify the economic and ecological costs of building data centers by claiming that the long-term benefits of the technology will be worth doing everything within our power right now to build infrastructure as quickly and as copiously as possible. As Altman wrote in a personal blog post on Tuesday: "Maybe with 10 gigawatts of compute, AI can figure out how to cure cancer. Or with 10 gigawatts of compute, AI can figure out how to provide customized tutoring to every student on earth. If we are limited by compute, we'll have to choose which one to prioritize; no one wants to make that choice, so let's go build."

OpenAI's significant investments raise more questions than answers -- CEO Sam Altman remains tight-lipped about how the company will deliver

OpenAI has positioned itself as one of the most important tech companies throughout 2025. It has placed itself at the heart of the $500 billion Stargate infrastructure investment scheme in the US, part of the Stargate UK build-out of new data centers worth tens of billions, and it's alleged to have pledged $10 billion to Broadcom for a custom chip deal too. Not to mention the $300 billion it's promised Oracle over the next few years. The only problem is: OpenAI doesn't have anywhere near the cash to pay for any of it. OpenAI lost $5 billion last year alone, and is on track to generate just $13 billion in revenue this year. Amidst all of this, OpenAI is undergoing a restructuring towards a for-profit model; it's still currently a non-profit, and its revenue-generating plans are still unclear. That's not necessarily uncommon for big tech firms. Amazon famously lost billions in the late 90s and early 2000s, as it re-invested to grow the business (and some would say, avoid taxes). As Sherwood News notes, Uber, Tesla, Snap, and Netflix all burned billions of dollars in building their businesses before they reached profitability. The difference this time is the scale. Where they collectively burned through just under $40 billion, OpenAI believes it will burn through $115 billion over the next four years, which is a staggering amount of money. Especially considering that OpenAI has only managed to raise just shy of $64 billion in its entire history. Sure, $40 billion of that came this year, but that is contingent on it completing a for-profit restructuring before the end of the year, and even that huge amount of money wouldn't even cover a single year of OpenAI's promised investment to Oracle, let alone everything else. So, where is the rest of the money going to come from? Immediate investments from the likes of Nvidia will help, but that's going to start with an insufficient $10 billion and trickle in, as OpenAI data centers come online in the following months and years. There's also been talk of global government investment from the likes of Saudi Arabia and India, but that's far from finalized. It may all rest on an IPO A larger proportion of the investment funds needed for all of OpenAI's projects is likely to come from a future IPO. OpenAI is already valued at over $500 billion thanks to a mix of massive investments, a strong-hold on industry mindshare, and OpenAI's admittedly impressive 700-800 million weekly users (though crucially, only a fraction pay for the service). It's speculated by Nasdaq that OpenAI could end up as the first trillion-dollar IPO. Though Microsoft will be an immediate major shareholder as part of any public listing, with the software giant expected to own at least 30% of OpenAI. That's part of the ongoing negotiations with Microsoft, which are said to be progressing, but are far from finalized. Before OpenAI can launch an IPO, though, it needs to become a for-profit company. That alone could push a potential IPO further into the future. That may be something OpenAI is okay with for now. CEO Sam Altman said to Bloomberg in August that an IPO for OpenAI was "not a priority," though that hardly rules it out. Considering OpenAI needs to generate hundreds of billions of dollars over the next few years, which it can't get from revenue, and appears unlikely to generate it from outside investment, an IPO seems like the most viable solution to its financial balance sheet in the near term. Pull the trigger before the bubble pops OpenAI is under pressure to get its restructuring complete before the end of the year to unlock the full Softbank investment, but that's not the only timeline it needs to meet. The sheer scale of investment in the AI industry and the incredible speed at which it's come about has prompted many to draw comparisons between AI and the dotcom bubble of the late-90s and early-2000s. When that happened, many huge companies either folded, or lost enormous sums of money. A potential AI bubble could be even worse. Even OpenAI CEO Sam Altman believes the AI industry is overinflated, and the company's chairman agreed with him in a recent interview with The Verge. He didn't mince words either, stating: "I think we're also in a bubble, and a lot of people will lose a lot of money." Just not OpenAI. That's the plan at least, and perhaps why we're seeing such efforts from all the companies involved in it to keep the hype and gravy train rolling. Nvidia has invested $100 billion in OpenAI, and OpenAI is buying (or leasing) Nvidia GPUs, and buying Oracle compute power. Oracle is also backing the OpenAI Stargate project, and Nvidia is also backing CoreWeave, who just announced billions of dollars in investment in OpenAI. It's hard not to speculate that these companies are all announcing enormous deals with each other to pump share prices and encourage further investment. In the near term, if OpenAI is going to launch an IPO at a sky-high valuation to generate the funds it needs for all future investments, it will need to do it before that bubble pops. Everyone's trying to sell the shovels OpenAI still hasn't quite figured out where the profit lies in AI. Indeed, neither has just about anyone in the space. There is no proven profitable business model in AI yet. The only companies making real money in the AI gold rush for now are the ones selling the digital shovels. Nvidia effectively holds a monopoly on the fastest AI hardware with its GPUs. That may change in the years to come as other firms catch up, or AI developers pivot towards application-specific integrated circuits (ASICs) in a fashion similar to how cryptocurrency mining evolved beyond GPUs For now, Nvidia is king, and it's clear that AI is a part of the company's core strategy moving forward, leveraging the idea that a cyclical investment is keeping AI companies going. Nvidia wants to keep building the hardware to run the AI, and OpenAI wants to provide the software shovel to go alongside it. It also pushes the idea that compute and electricity can equate to money. The AI's new clothes For hints at the future, OpenAI has made some hardware deals with Chinese developers and is poaching ex-Apple staff to build smart speakers running LLMs from OpenAI. For now, OpenAI needs a lot of money, and though there are some potential sources for it, even those could fall far short of what OpenAI has already promised. In a moment of candour, Altman even seems to acknowledge that the numbers don't quite add up. In a blog post, Altman discussed the compute in, money out equation: "Over the next couple of months, we'll be talking about some of our plans and the partners we are working with to make this a reality. Later this year, we'll talk about how we are financing it; given how increasing compute is the literal key to increasing revenue, we have some interesting new ideas." Those ideas will need to be very interesting if the numbers are ever going to add up. For now, we'll have to wait and see how OpenAI attempts to fulfill its promises. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our up-to-date news, analysis, and reviews in your feeds. Make sure to click the Follow button!

Oracle's $300B OpenAI pact could require $100B in new debt

Bubble, you say? OpenAI will borrow billions to pay Big Red, who will borrow billions on the hope OpenAI pays it As part of its $300 billion cloud compute contract with OpenAI, Oracle may need to borrow roughly $100 billion over the next four years to build the datacenters required, according to KeyBanc's projections. KeyBanc Capital Markets reportedly estimates that Big Red may need to raise about $25 billion a year in debt over the next four years if it intends to build all the extra cloud compute infrastructure required as part of a deal the company signed with OpenAI earlier this month. Where that funding will come from is anyone's guess, but it makes this one of the largest deals in AI look increasingly like one propped up by debt that, were the AI bubble ever to pop, could mean a lot of unpaid bills. The OpenAI agreement sent Oracle shares soaring earlier this month after the company confirmed the deal in its Q1 FY26 earnings call, which indicated that its total remaining performance obligations (RPO - a backlog of contracted revenue still to be delivered and recognized) ballooned by 359 percent year-over-year to reach $455 billion. As reported by the Wall Street Journal, the financial soothsayers at KeyBanc don't think Oracle has anywhere near enough cash to build out the infrastructure. It's going to need to earn the bulk of that RPO - and with good reason. Oracle had around $82.2 billion in long-term debt as of Aug. 31, plus $18 billion worth of bonds it put on offer in September to fund its AI-fueled expansion plans. According to Big Red's most recent earnings statement, Oracle has around $10 billion worth of cash and equivalents on hand, and around $9 billion of debt due within a year. Additionally, Oracle's free cash flow has declined 152 percent YoY on the back of a massive increase in capex, with the company spending $8.5 billion in Q1 26, up from $2.3 billion a year earlier. Oracle isn't the only company going deep into debt to fuel its AI ambitions, though. Its Stargate partner OpenAI is raising hefty capital as well. As ratings firm Moody's pointed out earlier this month when it expressed concern over the Oracle/OpenAI deal and its financial feasibility, Oracle's debt is just as concerning as the "counterparty risk" that OpenAI might not be able to pay its bills if and when Oracle actually goes $100 billion into debt to build all that infrastructure in the next four years. OpenAI, no matter its structure, has yet to turn a profit. As we pointed out when the Oracle deal was announced, OpenAI's annual recurring revenue is just $10 billion (although it's claimed it could book $20 billion this year) - and that's before you take debts into account to get to an as-yet-to-turn-positive net profit. OpenAI isn't expected to become cash-flow positive until the end of the decade, leaving it with little to do to fund its Oracle-backed dreams aside from seeking more investors. One firm's AI debt is another firm's cash to pay back its own AI debt, it seems. If that sounds to you a lot like the growth-over-profit model that presaged the dot-com collapse, you're not alone in thinking so. The Oracle/OpenAI deal has led many to opine that Sam Altman is fast becoming the driving force behind a likely collapse. Even he himself called AI a bubble, albeit one he believes is worth inflating. OpenAI's payments to Oracle for its infrastructure buildout, fueled by the expected $100 billion in debt Big Red will be taking on over the next four years, are set to begin in 2027. That means there may be a pin waiting to pop that bubble in 18 months or so if the financing falls through. With most big customers yet to see clear ROI on their AI investments, the bubble could very well pop before then.

OpenAI Expands Stargate With Five New Data Center Sites Across US

OpenAI plans to invest roughly $400 billion to develop five new US data center sites in partnership with Oracle Corp. and SoftBank Group Corp., marking the biggest push yet to fulfill an earlier pledge to spend a half-trillion dollars on artificial intelligence infrastructure in the country. The new locations, spread across Texas, New Mexico and Ohio, will eventually have a capacity of 7 gigawatts of power, or as much as some cities, the companies said Tuesday. The plans were announced by executives from the three tech firms at a press conference in Abilene, Texas, where OpenAI and Oracle have for months been developing the first data center branded as part of Stargate, the joint AI infrastructure initiative. The expansion brings the companies significantly closer to their goal of investing $500 billion in domestic data centers and AI infrastructure over the next four years -- a pledge made by their top executives in the first days after President Donald Trump's return to the White House. The added facilities are also poised to provide substantially more computing capacity to support OpenAI's services, including ChatGPT, which is now used by 700 million people weekly. "We will push on infrastructure as hard as we can because that is what will drive our ability to deliver amazing technology and basic products and services," OpenAI Chief Executive Officer Sam Altman said at the press conference.

OpenAI is upping the ante massively

If your head is spinning after OpenAI's recent flurry of megadeals, you're not alone. Hundreds of billions of dollars are at stake -- some of it promises future investment from Nvidia, some capital spending on data centres where construction has yet to start and some payments under a giant cloud computing contract with Oracle. Look past the details of this spate of announcements, though, and there's one overriding message: OpenAI is massively upping the ante. Weeks after the biggest tech companies increased their own capital spending plans, the company that started the generative AI gold rush wants everyone to know that it has put the first pieces in place for the biggest bet of all. It all looks like a calculated display of self-confidence. OpenAI wants customers, employees and partners across the tech industry to know that it is still leading the charge to superintelligence. That is particularly important at a time when it is involved in a messy overhaul of its corporate structure, and as the once clear technology lead it had in large language models erodes. This has also served as the opening salvo for what promises to be an epic assault on the financial markets, as OpenAI and its partners try to line up the financing for their giant bets. Among the questions yet to be answered: who will be on the hook for the data centres built in the hope that AI demand will continue to boom, and where will the cash flow come from to support the mountains of debt that are sure to be involved? A back-of-the-envelope tally suggests OpenAI has reached broad agreements that will cover capital spending of about $1tn, some it undertaken by partners in the Stargate project it announced in the Oval Office earlier this year. This includes a deal for Nvidia to invest up to $100bn of equity, supporting data centre spending that could top $500bn, as well as the announcement of five new data centres built by Stargate partners SoftBank and Oracle that might cost another $400bn. "Back of the envelope" is the operative term here, and it's far from clear how much of this capacity will ever be built. While the five data centres are projected to be completed over the next three years, the Nvidia deal is open-ended. There are also plenty of practical challenges to building and powering such a huge expansion in data centre capacity. Oracle, which is taking on the lion's share of the development under the Stargate project, is a relative minnow in this world and is already carrying significant debt. Not surprisingly, the many open questions have helped to feed suspicions that the AI market is entering a new and more bubbly phase. How likely is it that OpenAI's business will support the $300bn in cloud payments it is due to pay Oracle by 2030, or that Nvidia will see the $350-400bn in new chip sales that analysts project from its OpenAI deal? In deciding how much to price in to current valuations, the market has seemed somewhat schizophrenic. OpenAI's deal with Oracle sent the software company's shares into the stratosphere, despite the many open questions. But the initial stock price gains this week for Nvidia -- which, regardless of the timing of the data centre builds, at least secured an important commitment from OpenAI to remain a key customer -- quickly dissipated. OpenAI CEO Sam Altman says his company will lay out its detailed financing plan later this year, while Wall Street analysts are hoping that Oracle will reveal its own financial blueprint at a company event next month. Showing OpenAI and Oracle have serious backers in the wings would go a long way to convincing the markets about their plans. Nvidia's commitment of up to $100bn in new equity is critical for OpenAI as it looks to outspend a group of giant tech rivals with powerful balance sheets. But the first $10bn slug of this isn't due until the first data centre is deployed, something that isn't expected until the second half of 2026, with the rest only pencilled in for future projects. Ultimately, it will take significant -- and sustained -- revenue growth from OpenAI to support this whole endeavour. The big jump in capacity from Stargate data centres won't come online until later this decade. Before then, the company that sparked the AI boom needs to show not only that demand for data centre capacity is continuing to outpace supply, but that customers are willing to pay serious money for its services.

OpenAI, Oracle, SoftBank plan five new AI data centers for $500 billion Stargate project

ABILENE, Texas, Sept 23 (Reuters) - OpenAI, Oracle (ORCL.N), opens new tab and SoftBank (9984.T), opens new tab on Tuesday announced plans for five new artificial intelligence data centers in the United States to build out their ambitious Stargate project. U.S. President Donald Trump in January hosted top tech CEOs to launch Stargate, a private-sector initiative that plans to spend up to $500 billion to build AI infrastructure. AI is a priority for Trump and tech companies that are pouring billions into building the computers that are necessary to power the technology. ChatGPT-maker OpenAI said on Tuesday it will open three new sites with Oracle in Shackelford County, Texas, Dona Ana County, New Mexico and an undisclosed site in the Midwest. Two more data center sites will be built in Lordstown, Ohio and Milam County, Texas by OpenAI, Japan's SoftBank and a SoftBank affiliate. The new sites, the Oracle-OpenAI site expansion in Abilene, Texas, and the ongoing projects with CoreWeave (CRWV.O), opens new tab will bring Stargate's total data center capacity to nearly 7 gigawatts and more than $400 billion in investment over the next three years, OpenAI said. The $500 billion project was intended to generate 10 gigawatts in total data center capacity. "AI can only fulfill its promise if we build the compute to power it," OpenAI CEO Sam Altman said in a statement. The Tuesday's announcement, expected to create 25,000 onsite jobs, follows Nvidia (NVDA.O), opens new tab saying on Monday that it will invest up to $100 billion in OpenAI and supply data center chips. OpenAI and partners plan to use debt financing to lease chips for the Stargate project, people familiar with the matter said. OpenAI and its backer Microsoft (MSFT.O), opens new tab are among the tech giants pouring billions into data centers to power generative AI services such as ChatGPT and Copilot. AI's role in sensitive sectors such as defense and China's push to catch up have made the nascent technology a top priority for Trump. Reporting by Nilutpal Timsina and Angela Christy in Bengaluru and Deepa Seetharaman in Abilene; Editing by Shinjini Ganguli Our Standards: The Thomson Reuters Trust Principles., opens new tab

OpenAI's historic week has redefined the AI arms race for investors: 'I don't see this as crazy'

A new integration with Databricks brings OpenAI's models closer to enterprise customers, signaling a shift toward deeper commercial adoption. This week, OpenAI redefined what momentum -- and risk -- look like in the artificial intelligence arms race. Now comes the hard part: Executing on CEO Sam Altman's multitrillion-dollar vision. In a rapid-fire series of announcements, the company unveiled partnerships involving mind-bending sums of money and cemented its place at the center of the next wave of machine learning infrastructure. It began Monday with news that Nvidia plans to invest up to $100 billion to help OpenAI build data center capacity with millions of graphics processing units (GPUs). A day later, OpenAI revealed an expanded deal with Oracle and SoftBank, scaling its "Stargate" project to a $400 billion commitment across multiple phases and sites. Then on Thursday, OpenAI deepened its enterprise reach with a formal integration into Databricks -- signaling a new phase in its push for commercial adoption. "In all, this is the biggest tale yet of Silicon Valley's signature fake it 'til you make it, and so far it seems to be working," said Gil Luria, managing director at D.A. Davidson. The startup, known mostly for its ChatGPT chatbot and GPT family of large language models, is trying to become something much bigger: the next hyperscaler. Never mind that it's burning billions of dollars in cash and is fully reliant on outside capital to grow, nor that its buildout plans require the amount of energy that would be needed to power more than 13 million U.S. homes. Altman has long said that delivering the next era of AI will require exponentially more infrastructure. "You should expect OpenAI to spend trillions of dollars on data center construction in the not very distant future," he told CNBC and a small group of reporters over dinner in San Francisco last month. "And you should expect a bunch of economists wringing their hands, saying, 'This is so crazy, it's so reckless,' and we'll just be like, 'You know what? Let us do our thing.'" The story OpenAI is selling is that it's responding to market demand, which shows no signs of stopping. And eventually, the thinking goes, this will all be profitable. Current financial projections show OpenAI is on track to generate $125 billion in revenue by 2029, according to a source familiar with the company's internal forecasts. It's a bold bet - and one full of execution risk. Building out 17 gigawatts of capacity would require the equivalent of about 17 nuclear power plants, each of which takes at least a decade to build. The OpenAI team says talks are underway with hundreds of infrastructure providers across North America, but there are no firm answers yet. The U.S. grid is already strained, gas turbines are sold out through 2028, nuclear is slow to deploy and renewables are tied up in political roadblocks. "I am extremely bullish about nuclear, advanced fission, fusion," Altman said. "We should build more ... a lot more of the current generation of fission plants, given the needs for dense, dense energy." What did crystallize this week, however, was the scale of Altman's ambition as the OpenAI CEO began to put hard numbers behind his vision - some of them staggering. "Unlike previous technological revolutions or previous versions of the internet, there's so much infrastructure that's required, and this is a small sample of it," Altman said Tuesday at OpenAI's first Stargate site in Abilene, Texas. That mentality - blunt, ambitious, and dismissive of convention - has defined Altman's leadership in this new phase. Deedy Das, partner at Menlo Ventures, said the scale of OpenAI's infrastructure partnerships with Oracle may seem extreme to some, but he views it differently. "I don't see this as crazy. I see it as existential for the race to superintelligence," he said. Das argued that data and compute are the two biggest levers for scaling AI, and praised Altman for recognizing early on just how steep the ramp in infrastructure would need to be. "One of his gifts is reading the exponential and planning for it," he added. History shows that breakthroughs in AI aren't driven by smarter algorithms, he added, but by access to massive computing power. That's why companies like OpenAI, Google, and Anthropic are all chasing scale. Alibaba, OpenAI, and Anthropic have all pointed to insatiable demand for their models from consumers and businesses alike. As these companies push to embed AI into everyday workflows, the infrastructure stakes keep rising. Ubiquitous, always-on intelligence requires more than just code -- it takes power, land, chips, and years of planning. "I think people who use ChatGPT every day have no idea that this is what it takes," Altman said, gesturing to the site in Abilene. "This is 10% of what the site is going to be. We're doing ten of these." He added, "This requires such an insane amount of physical infrastructure to deliver." Though the buildout is flashy, the funding behind it remains hazy. Nvidia's $100 billion investment will arrive in $10 billion tranches over the next several years. OpenAI's buildout commitment with Oracle and SoftBank could eventually reach $400 billion. Microsoft, OpenAI's largest partner and shareholder that holds a right of first refusal for cloud deals, "is not willing to write them an unlimited check for compute," Luria said. "So they've turned to Oracle with a commitment considerably bigger than they can live up to." As a non-investment-grade startup without positive cash flow, OpenAI still faces a major financing challenge. Executives have called equity "the most expensive" way to fund infrastructure, and the company is preparing to take on debt to cover the rest of its buildout. Nvidia's long-term lease structure could help OpenAI secure better terms from banks, but it still needs to raise multiples of that capital in the private markets. OpenAI CFO Sarah Friar said the company plans to build some of its own first-party infrastructure -- not to replace partners like Oracle, but to become a savvier operator. Doing some of the work internally, she said, makes OpenAI "a better partner" by allowing it to challenge vendor assumptions and gain a clearer view into actual costs versus padded estimates. That, in turn, strengthens its position in rate negotiations. "The other tool at their disposal to reduce burn rate is to start selling ads within ChatGPT, which may also help with the fundraising," Luria suggested as a way to ease its burn rate. Altman said earlier this year in an interview with Ben Thompson's Stratechery that he'd rather test affiliate-style fees than traditional ads, floating a 2% cut when users buy something they discovered through the tool. He stressed rankings wouldn't be for sale, and while ads aren't ruled out, other monetization models come first. That question of how to monetize becomes even more urgent amid OpenAI's breakneck growth. "We are growing faster than any business I've ever heard of before," Altman said, adding that demand is accelerating so quickly that even this buildout pace will "look slow" in hindsight. Usage of ChatGPT, he noted, has surged roughly tenfold over the past 18 months, particularly on the enterprise side. And that demand isn't slowing. Accenture CEO Julie Sweet told CNBC's Sara Eisen on "Money Movers" Thursday that she's seeing an inflection point in enterprise adoption. "Every CEO board in the C-suite recognizes that advanced AI is critical to the future," she said. "The challenge right now they're facing is that they're really excited about the technology, and they're not yet AI-ready -- for most companies." Her firm signed 37 clients this quarter with bookings over $100 million. "We're still in the thick of it," she added. "There's a ton of work to do." Ali Ghodsi, CEO of Databricks, said Thursday that concerns about overbuilding miss the bigger picture. "There's going to be much more AI usage in the future than we have today. There's no doubt about that," he said. "Not every person on the planet is using at the fullest capacity these AI models. So more capacity will be needed." That optimism is one reason Ghodsi struck a formal integration deal with OpenAI this week -- a partnership that brings GPT-5 directly into Databricks' data tooling and reflects growing enterprise demand for OpenAI's models inside business software. Still, Ghodsi said it's important to maintain flexibility. Databricks now hosts all three major foundation models -- OpenAI, Anthropic, and Alphabet's Gemini -- so customers aren't locked into a single provider. But even as infrastructure ramps up, the scale and speed of OpenAI's spending spree have raised questions about execution. Nvidia is supplying capital and chips. Oracle is building the sites. OpenAI is anchoring the demand. It's a circular economy that could come under pressure if any one player falters. And while the headlines came fast this week, the physical buildout will take years to deliver -- with much of it dependent on energy and grid upgrades that remain uncertain. Friar acknowledged that challenge. "There's not enough compute to do all the things that AI can do, and so we need to get it started," she said. "And we need to do it as a full ecosystem."

OpenAI and Oracle show off Stargate AI data center in Texas and plan five more elsewhere

ABILENE, Texas (AP) -- The afternoon sun was so hot that OpenAI CEO Sam Altman traded his usual sweater for a T-shirt on the last legs of a Tuesday visit to the massive Stargate artificial intelligence data center complex that will power the future of ChatGPT. Altman announced Tuesday that OpenAI's flagship artificial AI data center in Texas will be joined by five others around the U.S. as the ChatGPT maker aims to make good on the $500 billion infrastructure investment promoted by President Donald Trump earlier this year. Stargate, a joint venture between OpenAI, Oracle and Softbank, said it is building two more data center complexes in Texas, one in New Mexico, one in Ohio and another in a Midwest location it hasn't yet disclosed. But it's the project in Abilene, Texas, that promised to be the biggest of them all, transforming what the city's mayor called an old railroad town. Oracle executives who visited the eight-building complex said it is already on track to be the world's largest AI supercluster once fully built, a reference to the hundreds of thousands of AI chips that will be running in its massive, H-shaped buildings. Altman said, "When you hit that button on ChatGPT, you really don't -- I don't, at least" -- think about what happens inside the data halls used to build and operate the chatbot. He and Oracle's new co-CEO Clay Magouyrk also sought to emphasize the steps they've taken to reduce the complex's environmental effects on a drought-prone region of West Texas, where temperatures hit 97 degrees Fahrenheit (36 degrees Celsius) on Tuesday. The complex will require about 900 megawatts of electricity to power the eight buildings, running hundreds of thousands of specialized AI chips. For the first building, each server rack holds 72 of Nvidia's GB200 chips, which are specially designed for the most intensive AI workloads. Each building has about 60,000 of them. One of the buildings is already operating, and a second that Altman and Magouyrk visited Tuesday is nearly complete. OpenAI and Oracle invited media and politicians, including U.S. Sen. Ted Cruz, a Texas Republican, to tour the site for the first time Tuesday. "Texas is ground zero for AI," Cruz said. Trump touted Stargate shortly after returning to the White House in January. The partnership said at that time it was investing $100 billion -- and eventually up to $500 billion -- to build large-scale data centers and the energy generation needed to further AI development. Trump called the project a "resounding declaration of confidence in America's potential" under his new administration, though construction on the flagship project in Abilene began last year and had been in planning for years before that. Originally developed to mine cryptocurrency, developers pivoted and expanded their designs to tailor the project to the AI boom sparked by ChatGPT. More than 6,000 workers now commute to the massive construction project each day, in what Mayor Weldon Hurt described as a significant boost to the local economy. "AI WORKERS? HUGE DISCOUNTS" says one hand-made sign for "move-in ready" homes of one to six bedrooms. But Hurt also acknowledged that residents have mixed feelings about the project due to its water and energy effects. The city's chronically stressed reservoirs were at roughly half-capacity on Monday. Residents must follow a two-day-a-week outdoor watering schedule, trading off based on whether their address numbers are odd or even. One million gallons of water from the city's municipal water systems provides an "initial fill" for a closed-loop system that cools the data center's computers, reducing the amount that evaporates. After that initial fill, Oracle expects each of the eight buildings to need another 12,000 gallons per year, which it describes as a "remarkably low figure for a facility of this scale." "These data centers are designed to not use water," Magouyrk said. "All of the data centers that we're building (in) this part of Stargate are designed to not use water. The reason we do that is because it turns out that's harmful for the environment and this is a better solution." The closed-loop system shows that the developer is "taking its impact on local public water supplies seriously," but the overall environmental effect is more nuanced because such systems require more electricity, which also means higher indirect water usage through power generation, said Shaolei Ren, a professor at the University of California, Riverside, who has studied AI's environmental toll. Indeed, the data center complex includes a new gas-fired power plant, using natural gas turbines similar to those that power warships. The companies say the plant is meant to provide backup power for the data halls and is a better option than traditional diesel generators. Most of the power comes from the local grid, which includes a mix of gas with the sprawling wind and solar farms that dot the region. Ren said that "even with emission-reduction measures, the health impacts of essentially turning the data center site into a power plant deserve further study for nearby communities." Arlene Mendler, a Stargate neighbor, said she wished she had more say in the project. "It has completely changed the way we were living," said Mendler, who lives across the street. "We moved up here 33 years ago for the peace, quiet, tranquility. After we got home from work, we could ride horses down the road. It was that type of a place." Now, she doesn't know what to do about the constant cacophony of construction sounds or the bright lights that have altered her nighttime views. The project was essentially a done deal once she found out about it. "They took 1,200 acres and just scraped it to bare dirt," said her husband, Fred Mendler. -- -- - The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP's text archives.

Unlimited power: OpenAI plans trillion-dollar data center network to power AI growth

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. Looking ahead: OpenAI is pushing ahead with some of the largest infrastructure projects ever attempted in the technology industry, unveiling plans for a trillion-dollar network of data centers designed to power AI models on a scale that dwarfs most industrial build-outs in recent memory. OpenAI is presenting the nationwide build-out as a way to revive US manufacturing while supporting tens of thousands of jobs. In January, the company joined President Trump at the White House to announce a $500 billion initiative known as Stargate, billed as a turning point for large-scale reindustrialization. This week, company executives gave reporters a tour of a massive site near Abilene, Texas, about 180 miles west of Dallas. They said the facility represents the first of many planned locations. Once empty brushland, the 1,100-acre development now contains eight massive data centers with a combined capacity of roughly 900 megawatts. More than 6,000 workers are currently deployed at the site, working in rotating 10-hour shifts, seven days a week. Gas turbines have been installed to provide backup power, while rows of steel towers rise from the former ranchland. Oracle, which is building and operating the facilities alongside OpenAI, described the project as the largest AI supercomputing cluster in the world. Standing at the site in the 100-degree heat, Anuj Saharan of OpenAI's computing team highlighted the rapid progress. "There was literally nothing here a year ago," he told reporters. The first completed building on the campus, painted stark white against the red dirt landscape, is larger than two Walmart Supercenters combined. Inside, tightly packed rows of servers house Nvidia's GB200 chips, with each cluster containing 72 processors. Industry analysts estimate that each unit costs about the same as a base-model Tesla Model 3, though Nvidia does not publicly disclose pricing. The servers are heavily secured: alarms sound if access doors are left open, and cameras monitor each rack to prevent unauthorized entry. The Abilene campus is only the start. OpenAI said it is developing five additional US sites that are expected to add nearly seven gigawatts of power capacity to its network, built in collaboration with Oracle and SoftBank. Three of these - an expansion of the Abilene project, another complex in New Mexico north of El Paso, and a location in the Midwest that has not yet been disclosed - are planned to deliver 5.5 gigawatts over the next several years. Two smaller sites near Austin, Texas, and in Lordstown, Ohio, are expected to generate 1.5 gigawatts between them. With weekly usage of its ChatGPT application now surpassing 700 million, demand has surged far beyond OpenAI's current computing resources. It estimates that it will ultimately need at least 20 gigawatts of capacity to support global demand, equal to about 20 conventional nuclear power plants. At an estimated $50 billion per gigawatt, this translates to a minimum of one trillion dollars in infrastructure investment. One executive suggested that demand could eventually reach 100 gigawatts, which would push total costs beyond five trillion dollars - a figure larger than the annual GDP of Germany or Japan. "I don't think we've figured out yet the final form of what financing for compute looks like," OpenAI Chief Executive Sam Altman told The Wall Street Journal. "But I assume, like in many other technological revolutions, figuring out the right answer to that will unlock a huge amount of value delivered to society." The company's announcement followed on the heels of a $100 billion deal this week with Nvidia that helped address questions about OpenAI's balance sheet. The momentum comes as SoftBank, once viewed as a central financing partner to OpenAI's data-center expansion, has scaled back ambitions. Of the five new sites, three will be developed with Oracle while SoftBank's involvement will be limited to the Austin- and Ohio-based facilities. On the ground in Abilene, however, enthusiasm remains tempered. Mayor Weldon W. Hurt acknowledged that residents had raised questions about the site's power and water demands, though he said many of those concerns had since been addressed. Oracle executives said the complex would support about 1,700 permanent positions once construction finishes, a relatively small number compared to the thousands of temporary construction jobs currently tied to the project. Even so, Hurt described the city as willing to embrace what the project will bring. "We are a railroad town," he said Tuesday. "We have Western heritage, but we are open to progress, always." Image credit: The Wall Street Journal

OpenAI Stargate announces five new datacenter sites in US

The Stargate project, the OpenAI-led plan to cover the world with datacenters, has announced plans to construct five new bit barns in the US. The $500 billion project involves OpenAI, Oracle, Softbank, AI investor MGX, and a handful of other technology partners who share the ambition to build hyperscale datacenters to host AI workloads. Oracle has said it will provide the backend support, with Softbank supposedly taking "financial responsibility" for the project, according to the group's January 2025 launch announcement. The five new datacenter sites are in Shackelford County and Milam County, Texas; Doña Ana County, New Mexico; Lordstown, Ohio; and a mystery site located somewhere in America's Midwest. Together with Stargate's existing site in Abilene, Texas, they'll bring Stargate's combined compute capacity to seven gigawatts over the next three years, OpenAI says. The AI behemoth claims it's on track to have 10GW of commitments secured by the end of this year. "AI can only fulfill its promise if we build the compute to power it. That compute is the key to ensuring everyone can benefit from AI and to unlocking future breakthroughs," OpenAI's CEO Sam Altman enthused in a Tuesday press release. "We're already making historic progress toward that goal through Stargate and moving quickly not just to meet its initial commitment, but to lay the foundation for what comes next," he added. The consortium has also announced a 230 megawatt datacenter for Norway and this month another datacenter complex in the UK's depressed Northeast region during US President Trump's recent state visit. Despite a slow start to the project, the coalition backing it has trumpeted lots of activity and says it has already committed to spend more than $400 billion over the next three years - and may burn through more than its original $500 billion estimate. Among Stargate's spending pledges commitments are a $300 billion payout to Oracle (which is overseeing the Abilene site as well as three of the new ones), and its income includes a $100 billion investment from Nvidia as OpenAI deploys "millions" of its critical GPUs, which provide the computing brainpower to the entire AI datacenter mega-buildout. While OpenAI claims the new sites will create 25,000 onsite jobs, it's noticeably quiet about the costs and impacts of power and water infrastructure needed to get these datacenters running. ®

OpenAI Announces Plans for Five More 'Stargate' Data Centers in the US

OpenAI’s massive Stargate project, an AI infrastructure partnership with Oracle and SoftBank, just announced five new sites, setting the stage for AI data centers to start popping up across the U.S. over the next decade. OpenAI said on Tuesday that the new data centers, along with the project's flagship site in Abilene, Texas and other ongoing projects, would bring Stargate to nearly 7 gigawatts of planned capacity and more than $400 billion in investment over the next three years. For context, one gigawatt can power roughly 750,000 homes. Three of the new data centers are being developed by Oracle and will be located in Shackelford County, Texas; Doña Ana County, New Mexico; and an unnamed site in the Midwest. The other two are being developed by SoftBank in Lordstown, Ohio, and Milam County, Texas. Stargate was first announced this past January during a White House press conference with President Donald Trump. The plan called for $500 billion in investments over four years to build out AI infrastructure nationwide. At the time, top executives from the three companies joined Trump to make the case that new infrastructure is essential for training and operating powerful AI models that could, for example, speed up the search for a cure for cancer. Originally, the Stargate initiative was pitched as a joint venture that would be helmed by SoftBank’s CEO Masayoshi Son. It has now become an umbrella term for new data center projects between OpenAI and either Oracle or SoftBank. Recent reporting alleged the project had hit some stumbling blocks, but with this announcement, it now seems to be ahead of schedule. Still, Stargate serves as an example of the circular nature of AI investments. For instance, details are still murky, but Wired reported that the already-in-the-works flagship Stargate site in Abilene is primarily owned and run by Oracle, with OpenAI serving as its main tenant. And just this week, Nvidia said it plans to invest up to $100 billion in OpenAI while also supplying the GPUs that power these data centers. “AI can only fulfill its promise if we build the compute to power it. That compute is the key to ensuring everyone can benefit from AI and to unlocking future breakthroughs,†OpenAI CEO Sam Altman said in a press release announcing the new sites. On his personal blog, Altman made a more dire warning, claiming that if the industry can’t reach 10 gigawatts of compute, it may have to decide which AI applications take priority. He pointed to examples like discovering a cancer cure versus providing customized tutoring for every student on Earth. The exec said it's his goal to "create a factory that can produce a gigawatt of new AI infrastructure every week." “If we are limited by compute, we’ll have to choose which one to prioritize; no one wants to make that choice, so let’s go build," Altman wrote.

OpenAI expands Stargate AI project with five US sites

OpenAI has struck agreements to develop five new US data centres, pushing the cost of its AI infrastructure project Stargate to about $400bn, the latest in a series of recent megadeals by the lossmaking start-up. Tuesday's announcement will expand Stargate, whose other backers include SoftBank and US software group Oracle, from a single site in Abilene, Texas, to half a dozen around the country. Stargate's backers have pitched the high-profile infrastructure project as the cornerstone of America's efforts to lead in artificial intelligence and remain ahead of Chinese competition. But OpenAI and its partners must still raise the enormous sums required to fund the sites. OpenAI's chief executive Sam Altman said the group was confident in financing the $400bn commitment at a press conference in Abilene on Tuesday. The massive outlay will require OpenAI to boost its annual revenues far beyond current levels of roughly $13bn, sell more equity and, along with its partners, raise substantial amounts of debt. OpenAI intends to be the customer for all of the new capacity announced on Tuesday, which it needs to train and run its AI models. Its ChatGPT chatbot has raced to 700mn regular users, making it the fastest-growing consumer product of all time. "People will over-invest and lose money, people will under-invest and lose revenue . . . but over the arc that we have to plan over, we are confident that this technology will drive a new wave of unprecedented economic growth," said Altman. The completion of the data centres is expected to take three years, require investment of $400bn and bring Stargate to 7 gigawatts of capacity, against an ultimate goal of 10GW -- roughly the equivalent output of 10 nuclear reactors. Three of the data centres will be developed with Oracle -- in New Mexico, Texas and the Midwest -- forming part of OpenAI's recent deal to purchase $300bn worth of computing power over five years from the software group. Two further projects will be developed in Ohio and Texas in partnership with SoftBank, which has committed to bankroll a large portion of Stargate. "Texas is ground zero for AI," said Texas Senator Ted Cruz, citing the state's low-cost energy and light-touch regulation as providing a model for beating China. "I told Sam, 'bring your whole company here, but leave the damn communists at home'." Stargate, unveiled at the White House in January with President Donald Trump, was originally structured as a $500bn joint venture controlled by OpenAI, SoftBank, Oracle and Abu Dhabi sovereign fund MGX. Since then, OpenAI has moved away from a rigid definition of Stargate, with executives at the company using the term to cover any data centre project the company is involved in, including overseas projects in the United Arab Emirates and the UK. An 800-acre site in Abilene, billed as the first Stargate project, was being developed by data centre start-up Crusoe and Oracle months before Stargate was announced. It had originally been considered by Elon Musk as a location for his own AI venture, according to a person with knowledge of the matter. OpenAI's executives estimate that each gigawatt of capacity costs $50bn to develop, roughly two-thirds of which will be spent on chips and networking equipment. The remainder will fund the purchase of land, development of the data centres and other costs. On Monday, OpenAI gave an indication of how it would approach that challenge, announcing a $100bn deal with Nvidia. The $4.3tn chip designer will invest in increments of $10bn as OpenAI develops capacity, in exchange for equity in the company. OpenAI plans to use the long-term commitment from Nvidia to raise cheaper debt, leveraging the chipmaker's backing largely to purchase millions of Nvidia's own chips, according to executives at the company. "As our revenue scales, we can pay as you go," said Altman. "The chips and the systems are a humungous percentage of the cost and its hard to pay that upfront." "What really drives a lot of progress is when people also figure out how to innovate on the financial model and financial instruments," he added.

Sam Altman on OpenAI's $850 billion in planned buildouts: 'People are worried. I totally get that'

ABILENE, Texas -- Sam Altman stood on a patch of hot Texas dirt, the kind that turns to dust storms on dry days and mud slicks after a sudden rain. Behind him stretched the outlines of what will soon be a massive data center complex in the west-central part of the state, where heavy wind often meets extreme heat. It was a fitting backdrop for the OpenAI CEO to unveil what he calls the largest infrastructure push of the modern internet era: a 17-gigawatt buildout in partnership with Oracle, Nvidia, and SoftBank. In less than 48 hours, OpenAI has announced commitments equal to 17 nuclear plants or about nine Hoover Dams. The plan will require the amount of electricity needed to power more than 13 million U.S. homes. The scale is staggering, even for a company that's raised a record amount of private market cash and seen its valuation swell to $500 billion. At roughly $50 billion per site, OpenAI's projects add up to about $850 billion in spending, nearly half of the $2 trillion global AI infrastructure surge HSBC now forecasts. Altman understands the concern. But he rejects the idea that the spending spree is overkill. "People are worried. I totally get that. I think that's a very natural thing," Altman told CNBC on Tuesday from the site of the first of its mega data centers in Abilene. "We are growing faster than any business I've ever heard of before." Altman insisted that the building boom is in response to soaring demand, highlighting the tenfold jump in ChatGPT usage over the past 18 months. He said a network of supercomputing facilities is what's required to maximize the capabilities of AI.

OpenAI's Stargate data center plan adds five new U.S. sites

Why it matters: The push to build massive, power-thirsty data centers is key to winning the AI race. Between the lines: OpenAI made the announcement at its flagship site in Abilene, Texas in partnership with Oracle and Softbank, alongside Sen. Ted Cruz (R-Texas) and Rep. Jodey Arrington (R-Texas). * The additional sites will be located in Lordstown, Ohio; Shackelford County, Texas; Milam County, Texas; Doña Ana County, New Mexico; and an additional site in the Midwest to be named later. * OpenAI said in a blog post that the company is investigating additional sites. The big picture: OpenAI says the new sites put the firm ahead of schedule to lock in its previously announced $500 billion, 10-gigawatt commitment by the end of 2025. * SoftBank CFO Yoshimitsu Goto admitted last month that the Stargate project faced issues with site selection and coordinating stakeholders, putting the project behind schedule. * But OpenAI says Stargate now has $400 billion of the originally announced $500 billion goal lined up over the next three years. What they're saying: "AI can only fulfill its promise if we build the compute to power it," OpenAI CEO Sam Altman said in a company blog post today. * In a separate post on his personal website Altman warned that limiting compute would force society to make choices between competing priorities -- like curing cancer or providing a personalized tutor for "every student on earth." * "If we are limited by compute, we'll have to choose which one to prioritize; no one wants to make that choice, so let's go build," Altman wrote. What's next: OpenAI and its partners say they're still evaluating additional sites and expect to announce the location of the new unnamed Midwest location soon. Go deeper: How is Stargate's $500B getting funded?

I met Sam Altman in Texas. He's turning the race for AI into a gigawatt arms race | Fortune

Sam Altman stood outside Building 2 at OpenAI, Oracle, and SoftBank's flagship Stargate data center in Abilene, Texas. He -- along with the cluster of journalists peppering him with questions -- looked small against the backdrop of the sprawling 800-acre site, swarming with thousands of construction workers and dotted with spools of fiber cable, steel beams, water pipes, and heavy machinery. As I reported on Tuesday, we were there for a media event to tout the progress of their high-profile and ambitious "Stargate" AI infrastructure project. They announced an expansion of the Abilene site, plus plans to build five massive new data center complexes across the U.S. over the next several years. Altogether, the initiative represents hundreds of billions of dollars in investment -- a project of mind-boggling scale. In Abilene alone, a crew of 6,400 workers has already flattened hills by moving mountains of soil and laid enough fiber optic cable to wrap the Earth 16 times. "We cannot fall behind in the need to put the infrastructure together to make this revolution happen," Altman told reporters during the media event, which also included Clay Magouryk. one of Oracle's two new CEOs, as well as Texas Senator Ted Cruz. "What you saw today is just a small fraction of what this site will eventually be -- and this site is just a small fraction of what we're building. All of that still won't be enough to serve even the demand of ChatGPT," he added, referring to OpenAI's flagship product. Altman and OpenAI have been relentless in their drive to "scale compute." By this, they don't mean chasing the next algorithmic breakthrough or elegant line of code. They mean brute industrial force: millions of chips, sprawling campuses wired with fiber, and gigawatts of electricity -- along with the gallons of water needed to help cool all that equipment.. To OpenAI, scaling compute means piling on ever more of this horsepower, betting that sheer scale -- not software magic -- is what will unlock not just artificial general intelligence (AGI), which the company defines as "highly autonomous systems that outperform humans at most economically valuable work," but what it calls artificial super intelligence (ASI), that would hypothetically surpass human capabilities in all domains. That's why OpenAI keeps pointing to a number: 10 gigawatts of capacity across the Stargate project sites. Ten gigawatts -- enough to power roughly 7.5 million homes, or an entire regional grid -- marks a shift in how AI capacity is measured. At this scale, Altman explained to me with a quick handshake before the press gaggle, companies like OpenAI don't even bother counting GPUs anymore. The unit of measure has become gigawatts: how much electricity the entire fleet of chips consumes. That number is shorthand for the only thing that matters: how much compute the company can keep running. That's why it was so striking to come home from Texas and read Alex Heath's Sources the very next day. In it, Heath revealed an internal Slack note Altman had shared with employees on the same day I saw him in Abilene. Altman spelled out what he called OpenAI's "audacious long-term goal": to build not 10, not 100, but a staggering 250 gigawatts of capacity by 2033. In the note, he disclosed that OpenAI started the year at "around" 230 megawatts of capacity and is "now on track to exit 2025 north of 2GW of operational capacity." To put that into perspective: 250 gigawatts would be about a quarter of the entire U.S. electrical generation capacity, which hovers around 1,200 GW. And Altman isn't just talking about electricity. The number is shorthand for the entire industrial system required to use it: the chips, the data centers, the cooling and water, the networking fiber and high-speed interconnects to tie millions of processors into supercomputers. Heath reported that Altman's Slack note announced OpenAI is "formalizing the industrial compute team," led by Peter Hoeschele, who reports to president Greg Brockman. "The mission is simple: create and deliver massive usable compute as fast as physics allows, to power us through ASI," Altman wrote. "In several years, I think this could be something like a gigawatt per week, although that will require us to completely reimagine how we build compute." "Industrial compute should be considered a new core bet (like research, consumer devices, custom chips, robotics, applications, etc.) which will hire and operate in the way it needs to run at maximum effectiveness for the domain," Altman continued. "We've already invested hundreds of billions of dollars, and doing this right will cost trillions. We will need support from team members across OpenAI to help us move fast, unlock projects, and clear the path for the buildout ahead." A quarter of the U.S. power grid. Trillions in cost. Does that sound bonkers to you? It does to me -- which is precisely why I hopped on a plane to Dallas, rented a car, and drove three hours through rolling hills and ranches to Abilene to see for myself. The scale of this one site is staggering. Imagining it multiplied by dozens is nearly impossible. I told Altman that the scene in Abilene reminded me a bit of a tour I recently took of Hoover Dam, one of the great engineering feats of the 20th century that produces about 2 gigawatts of power at capacity. In the 1930s, Hoover Dam was a symbol of American industrial might: concrete, turbines, and power on a scale no one had imagined. Altman acknowledged that "people like to pick their historical analogies" and thought the "vibe was right" to compare Stargate to Hoover Dam. It wasn't his own personal favorite, however: "A recent thing I've thought about is airplane factories," he said. "The history of what went into airplane factories, or container ships, the whole industry that came around those," he said. "And certainly, everything that went into the Apollo program." That's when I realized: whether you think Altman's goals make sense, seem nuts, or feel downright reckless really comes down to what you believe about AI itself. If you think supercharged versions of AI will change everything -- and mostly for the good, like curing cancer -- or you are a China hawk that wants to win the new AI 'cold war' with China, then Altman's empire of data centers looks like a necessary bet. If you're skeptical, it looks like the biggest boondoggle since America's grandest infrastructure follies: think California's long-awaited high-speed rail. If you've read Karen Hao's Empire of AI, you might also be shouting that scaling isn't inevitable -- that building a 'compute empire' risks centralizing power, draining resources, and sidelining efficiency and safety. And if you think AGI will kill us all, like Eliezer Yudowsky? Well, you won't be a fan. No one can predict the future, of course. My greater concern is that there isn't nearly enough public awareness of what's happening here. I don't mean just in Abilene, with its mesquite shrubland ground into dust, or even OpenAI's expanding Stargate ambitions around the US and beyond. I mean the vast, almost unimaginable infrastructure buildout across Big Tech -- the buildout that's propping up the stock market, fueling a data center arms race with China, and reshaping energy, land, and labor around the world. Are we sleepwalking into the equivalent of an AI industrial revolution -- and not a metaphorical one, but in terms of actual building of physical stuff -- without truly reckoning with its costs versus its benefits? Even Sam Altman doesn't think enough people understand what he's talking about. "Do you feel like people understand what 'compute' is?" I asked him outside of Building 2. That is, does the average citizen really grok what Altman is saying about the physical manifestation of these mega data centers? "No, that's why we wanted to do this," he said about the Abilene media event. "I don't think when you hit the button on ChatGPT...you think of walking the halls here." Of course, Hoover Dam, too, was also divisive, controversial and considered risky. But I wasn't alive when it was built. This time I could see the dust rising in Abilene with my own eyes -- and while Altman talked about walking the newly-built halls filled with racks of AI chips, I walked away unsettled about what comes next. Sam Altman's AI empire will devour as much power as New York City and San Diego combined. Experts say it's 'scary' - by Eva Roytburg Exclusive: Startup using AI to automate software testing in the age of 'vibe coding' receives $20 million in new venture funding - by Jeremy Kahn OpenAI plans to build 5 giant U.S. 'Stargate' datacenters, a $400B challenge to Meta and Microsoft in the relentless AI arms race - by Sharon Goldman Nscale announces record-breaking $1.1 billion Series B. UK cloud infrastructure company Nscale announced a $1.1 billion funding round, the largest in UK and European history. The Series B, led by Aker ASA with participation from NVIDIA, Dell, Fidelity, Point72, and others, will accelerate Nscale's rollout of "AI factory" data centers across Europe, North America, and the Middle East. The company, which recently unveiled partnerships with Microsoft, NVIDIA, and OpenAI to establish Stargate UK and launched Stargate Norway with Aker, says the funding will expand its engineering teams and GPU deployment pipeline as it races to deliver sovereign, energy-efficient AI infrastructure at massive scale. OpenAI and Databricks strike AI agent deal. OpenAI and data platform Databricks struck a multiyear deal expected to generate about $100M, the Wall Street Journal reported, making OpenAI's models -- including GPT-5 -- natively available inside Databricks so enterprises can build AI agents on their own data "out of the box." The partnership includes joint research, and OpenAI COO Brad Lightcap says the two aim to "far eclipse" the contracted figure. It targets a key adoption barrier -- reliable, data-integrated agents -- tapping Databricks' 20,000+ customers and $4B ARR footprint (Mastercard is already using Databricks-built agents for onboarding/support). The move sits alongside Databricks' model partnerships (e.g., Anthropic) and a broader vendor push (Salesforce, Workday) to pair agent tooling with customer data, as OpenAI ramps its infrastructure ambitions with Oracle/SoftBank. Trump administration will provide Elon Musk's xAI to federal agencies. According to the Wall Street Journal, Elon Musk's xAI will be available to federal agencies via the General Services Administration for just 42 cents -- part of a broader effort to bring top AI systems into government. The arrangement mirrors similar nominal-fee deals with Google (47 cents), OpenAI ($1), and Anthropic ($1), meaning Washington is now working with all four leading U.S. model makers, each of which also has $200M Pentagon contracts. Officials say the low-cost access is less about revenue than securing a foothold in government AI adoption, where automating bureaucratic processes is seen as a major opportunity. The move also highlights a thaw in Musk's relationship with the White House, while underscoring the administration's push to foster competition among frontier AI providers. That's how much AI-driven capital expenditures in fiscal year 2025 will translate into total U.S. economic output, according to new economic modeling results released by IMPLAN. The analysis, based on reported 2025 capital expenditure estimates, found that Amazon, Alphabet, Microsoft, and Meta are set to spend a record $364B on AI-driven capital expenditures in fiscal 2025 -- more than all new U.S. commercial construction in 2023. The modeling showed that those dollars will generate $923B in total U.S. economic output, support 2.7M jobs, and add $469B to GDP. Every $1 invested, the report said, yields $2.50 in impact, rippling from construction and chip manufacturing to retail and local services. For policymakers, it's a reminder: Big Tech's AI buildout isn't just about data centers -- it's reshaping the broader U.S. economy.

Inside Stargate AI's massive Texas data center campus, with 5 more sites announced

The Stargate Project has brought the global artificial intelligence race to the West Texas desert. And on Sept. 23, it also brought a flock of industry leaders, U.S. congressmen, other policymakers and a gaggle of regional and news outlets. All eyes are on the collaboration between OpenAI, Oracle and SoftBank to construct data centers and other infrastructure to support the artificial intelligence boom. On Sept. 23, Stargate also announced it would also be building five additional data center sites across the country. There are plans to build more capacity near the flagship Abilene site, as well as sites in two other Texas counties, Shackelford County and Milam County. Other locations include Doña Ana County, New Mexico, Lordstown, Ohio, and another soon-to-be-disclosed location in the Midwest. The joint venture was first announced at the White House in January with President Donald Trump, as part of a broader push for investment in American AI infrastructure. As the high-stakes international competition to develop and deploy the technology escalates, the companies are betting big on the $500 billion program, with AI kingpin NVIDIA recently joining the fray by investing $100 billion in OpenAI, it announced. Locals chat about the data centers over their morning coffee downtown -- and anyone who's paying attention to anything relatively tied to the AI industry at least knows about Stargate, even if they can't point Abilene out on a map. "Texas is ground zero for AI," U.S. Center Ted Cruz told a crowd. He praised the state's availability of low-cost energy, open-for-business environment with low taxes and low regulations, and the way the state lionizes entrepreneurs. "So in my view, Texas and tech and AI are a perfect match," Cruz said. Over 1,000 acres of high-tech The campus, about 180 miles from Dallas, is on track to provide OpenAI with the world's largest supercluster when fully built, according to Oracle. The 1,100-acre campus will have eight near-identical buildings, totaling up to 4 million square feet and is expected to be fully completed around this time next year. The buildings house servers filled with graphics processing units (GPUs). There are numerous metal boxes with blinking lights and wires of various sizes and color. Fiber is being installed both below ground and above, tubes are designed to pump a cooling liquid using a closed-loop system. A lot of pieces work together to support the highly technical compute needs. A portion of the campus is already operating on Oracle Cloud Infrastructure after Oracle began delivering the first NVIDIA GB200 racks in June. NVIDIA's deal with OpenAI will build and deploy at least 10 gigawatts of AI data centers. It's surrounded by rugged scenery: red dirt kicked up by gusts of wind, rocky terrain and short trees. The Abilene skyline is visible through a few miles of hazy air. There are roadways throughout the campus, including a makeshift six-lane "highway," to ease the traffic from roughly 6,400 workers traveling on and off the site alongside semi-trucks. OpenAI CEO Sam Altman said the Abilene campus is a fraction of what the partnership is building. Even then, more infrastructure will still be needed to serve the demand of ChatGPT. "We've got to make this investment," Altman said. With global competition heating up between the U.S. and other major powers, " ... we cannot fall behind in the need to put the infrastructure together to make this revolution happen." Commitment to Abilene The data centers being built at the new locations, which were selected among 300 proposals from more than 30 states, drive Stargate ahead of schedule to secure a full $500 billion, 10 gigawatt commitment by the end of the year. "We're really focused on enabling AI to have all the compute capacity needs," new co-CEO of Oracle, Clay Magouyrk said. Abilene Mayor Clay Weldon Hurt said his city is steeped in tradition, and acknowledged there is a mix of feelings among local residents. However, the town is open to progress, he added. "I have a commitment to our citizens of Abilene to make Abilene a better place, and we have that commitment to grow," Hurt said. "So, even though we're very proud of our heritage, and we're always going to be proud of that heritage, we're always going to be open [for business], and we're so excited that this opportunity has come to Abilene, and we welcome it." Sen. Cruz called Stargate an impressive start, but encouraged more building and hiring. "This is the beginning of a long-term effort to invest in American jobs, supply the additional power needed for AI, and deliver products and services that will benefit all Americans," he said. 2025 The Dallas Morning News. Distributed by Tribune Content Agency, LLC.

OpenAI's first data center in $500B Stargate project is open in Texas, with sites coming in New Mexico and Ohio

ABILENE, Texas -- OpenAI and Oracle are betting big on America's AI future, bringing online the flagship site of the $500 billion Stargate program, a sweeping infrastructure push to secure the compute needed to power the future of artificial intelligence. The debut site in Abilene, Texas, about 180 miles west of Dallas, is up and running, filled with Oracle Cloud infrastructure and racks of Nvidia chips. The data center, which is being leased by Oracle, is one of the most notable physical landmarks to emerge from an unprecedented boom in demand for infrastructure to power AI. Over $2 trillion in AI infrastructure has been planned around the world, according to an HSBC estimate this week. OpenAI is leading the way. In addition to the $500 billion Stargate project, the startup on Monday announced an equity investment deal with Nvidia that will add an estimated $500 billion worth of data centers in the coming years. Since 2019, Microsoft has invested billions of dollars in OpenAI, providing loads of access to Azure credits. Additionally, OpenAI contracts with smaller cloud companies for additional compute capacity and help operating its infrastructure. One building on the Abilene site is operational while another is nearly complete. The campus has the potential to ultimately scale past a gigawatt of capacity, OpenAI finance chief Sarah Friar told CNBC. That would be enough electricity to power about 750,000 U.S. homes. The data center construction plans are important enough that Nvidia CEO Jensen Huang personally engaged in last-minute negotiations with OpenAI CEO Sam Altman over the weekend to get in on the action, CNBC reported earlier on Tuesday. "People are starting to recognize just the sheer scale that will be required," Friar said. "We're just getting going here in Abilene, Texas, but you'll see this all around the United States and beyond." The scale of the project's construction was necessary to supply the amount of compute required to operate OpenAI's models, Friar said. "What we see today is a massive compute crunch," she said. "There's not enough compute to do all the things that AI can do."

OpenAI announces five new AI data centres in addition to flagship Texas location

Sam Altman, the CEO of OpenAI, announced on Tuesday that it is building five new Stargate AI data centres around the US. The flagship location in Abilene, Texas is being constructed with the centre's environmental impact in mind, and is expected to create 1,700 new jobs. The afternoon sun was so hot that OpenAI CEO Sam Altman traded his usual crewneck sweater for a T-shirt on the last legs of a Tuesday visit to the massive Stargate artificial intelligence data centre complex that will power the future of ChatGPT. OpenAI announced Tuesday that its flagship AI data centre in Texas will be joined by five others around the US as the ChatGPT maker aims to make good on the $500 billion infrastructure investment promoted by President Donald Trump earlier this year. Stargate, a joint venture between OpenAI, Oracle and SoftBank, said it is building two more data centre complexes in Texas, one in New Mexico, one in Ohio and another in a Midwest location it hasn't yet disclosed. But it's the project in Abilene, Texas, that promised to be the biggest of them all, transforming what the city's mayor called an old railroad town. Oracle executives who visited the eight-building complex said it is already on track to be the world's largest AI supercluster once fully built, a reference to its network of hundreds of thousands of AI chips that will be running in its massive, H-shaped buildings. Altman said, "When you hit that button on ChatGPT, you really don't -- I don't, at least -- think about what happens inside the data halls used to build and operate the chatbot." He and Oracle's new co-CEO Clay Magouyrk also sought to emphasise the steps they've taken to reduce the energy-hungry complex's environmental effects on a drought-prone region of West Texas, where temperatures hit 97 degrees Fahrenheit (36 degrees Celsius) on Tuesday. "We're burning gas to run this data centre," said Altman, but added that "in the long trajectory of Stargate" the hope is to rely on many other power sources. The complex will require about 900 megawatts of electricity to power the eight buildings and their hundreds of thousands of specialised AI chips. Read moreOpenAI releases ChatGPT-5 as global AI race accelerates One of the buildings is already operating, and a second that Altman and Magouyrk visited Tuesday is nearly complete. Each server rack in those buildings holds 72 of Nvidia's GB200 chips, which are specially designed for the most intensive AI workloads. Each building is expected to have about 60,000 of them. More than 6,000 workers now commute to the massive construction project each day, in what Mayor Weldon Hurt described as a significant boost to the local economy. The campus and nearby expansion will provide nearly 1,700 jobs onsite when fully operational, Oracle said, with "thousands more indirect jobs" predicted to be created. Hand-made signs lining the roads to the centre market "move-in-ready" homes for workers. "AI WORKERS? HUGE DISCOUNTS," says one, promising homes with one to six bedrooms. But Hurt also acknowledged that residents have mixed feelings about the project due to its water and energy needs. The city's chronically stressed reservoirs were at roughly half-capacity this week. Residents must follow a two-day-a-week outdoor watering schedule, trading off based on whether their address numbers are odd or even. One million gallons of water from the city's municipal water systems provides an "initial fill" for a closed-loop system that cools the data centre's computers and keeps the water from evaporating. After that initial fill, Oracle expects each of the eight buildings to need another 12,000 gallons per year, which it describes as a "remarkably low figure for a facility of this scale." "These data centres are designed to not use water," Magouyrk said. "All of the data centres that we're building in this part of Stargate are designed to not use water. The reason we do that is because it turns out that's harmful for the environment and this is a better solution." The closed-loop system shows that the developer is "taking its impact on local public water supplies seriously," but the overall environmental effect is more nuanced because such systems require more electricity, which also means higher indirect water usage through power generation, said Shaolei Ren, a professor at the University of California, Riverside, who has studied AI's environmental toll. Indeed, the data centre complex includes a new gas-fired power plant, using natural gas turbines similar to those that power warships. The companies say the plant is meant to provide backup power for the data halls and is a better option than traditional diesel generators. Most of the power comes from the local grid, sourced from a mix of natural gas with the sprawling wind and solar farms that dot the windy and sunny region. Ren said that "even with emission-reduction measures, the health impacts of essentially turning the data centre site into a power plant deserve further study for nearby communities." Arlene Mendler, a Stargate neighbour, said she wished she had more say in the project that eliminated a vast tract of mesquite shrubland, home to coyotes and roadrunners. "It has completely changed the way we were living," said Mendler, who lives across the street. "We moved up here 33 years ago for the peace, quiet, tranquillity. After we got home from work, we could ride horses down the road. It was that type of a place." Now, she doesn't know what to do about the constant cacophony of construction sounds or the bright lights that have altered her night-time views. The project was essentially a done deal once she found out about it. Read moreThe unlikely success story of tech-giant ASML, the biggest backer of France's Mistral AI "They took 1,200 acres and just scraped it to bare dirt," said her husband, Fred Mendler. The first time most residents heard of Stargate -- at least by that name -- was when Trump announced the project shortly after returning to the White House in January. Originally planned as a facility to mine cryptocurrency, developers had pivoted and expanded their designs to tailor the project to the AI boom sparked by ChatGPT. The partnership said at that time it was investing $100 billion -- and eventually up to $500 billion -- to build large-scale data centres and the energy generation needed to further AI development. More recently, OpenAI signed a deal to buy $300 billion of computing capacity from Oracle. It's a huge bet for the San Francisco-based AI start-up, which was founded as a non-profit. OpenAI and Oracle invited media and politicians, including US Sen. Ted Cruz, a Texas Republican, to tour the site for the first time Tuesday. Cruz called Texas "ground zero for AI" because if "you're building a data centre, what do you want? No. 1, you want abundant, low-cost energy." Of the other five Stargate data centre projects announced Tuesday, Oracle is working with OpenAI to build one just north-east of Abilene, in Shackelford County, Texas, and another in New Mexico's Doña Ana County. It also said it is working to build one in the Midwest. SoftBank said it has broken ground on two more in Lordstown, Ohio, and in Milam County, Texas. The projects offer OpenAI a way to break out from its long-time partnership with Microsoft, which until recently was the start-up's exclusive computing partner. Altman told The Associated Press his company has been "severely limited for the value we can offer to people." "ChatGPT is slow. It's not as smart as we'd like to be. Many users can't use it as much as they would like," Altman said. "We have many other ideas and products we want to build."

OpenAI's Sam Altman announces expansion plans across U.S. on visit to Stargate AI supercluster in Texas

The Stargate joint venture will be building more data center complexes in Texas, New Mexico, Ohio, and another in an undisclosed Midwest location. The afternoon sun was so hot that OpenAI CEO Sam Altman traded his usual crewneck sweater for a T-shirt on the last legs of a Tuesday visit to the massive Stargate artificial intelligence data center complex that will power the future of ChatGPT. OpenAI announced Tuesday that its flagship AI data center in Texas will be joined by five others around the U.S. as the ChatGPT maker aims to make good on the $500 billion infrastructure investment promoted by President Donald Trump earlier this year. Stargate, a joint venture between OpenAI, Oracle and Softbank, said it is building two more data center complexes in Texas, one in New Mexico, one in Ohio and another in a Midwest location it hasn't yet disclosed. But it's the project in Abilene, Texas, that promised to be the biggest of them all, transforming what the city's mayor called an old railroad town. Oracle executives visiting the eight-building complex said it is already on track to be the world's largest AI supercluster once fully built, a reference to its network of hundreds of thousands of AI computer chips that will be running in its H-shaped buildings. Altman said, "When you hit that button on ChatGPT, you really don't -- I don't, at least" -- think about what happens inside the data halls used to build and operate the chatbot. He and Oracle's new co-CEO Clay Magouyrk also sought to emphasize the steps they've taken to reduce the energy-hungry complex's environmental effects on a drought-prone region of West Texas, where temperatures hit 97 degrees Fahrenheit (36 degrees Celsius) on Tuesday. "We're burning gas to run this data center," said Altman, but added that "in the long trajectory of Stargate" the hope is to rely on many other power sources. The complex will require about 900 megawatts of electricity to power the eight buildings. One is already operating, and a second that Altman and Magouyrk visited Tuesday is nearly complete. Each server rack in those buildings holds 72 of Nvidia's GB200 chips, which are specially designed for the most intensive AI workloads. Each building is expected to have about 60,000 of them. More than 6,000 workers now commute to the massive construction project each day, in what Mayor Weldon Hurt described as a significant boost to the local economy. The campus and nearby expansion will provide nearly 1,700 jobs onsite when fully operational, Oracle said, with "thousands more indirect jobs" predicted to be created. Hand-made signs lining the roads to the facility advertise "move-in-ready" homes for workers. "AI WORKERS? HUGE DISCOUNTS" says one promising homes with one to six bedrooms. But Hurt also acknowledged that residents have mixed feelings about the project due to its water and energy needs. The city's chronically stressed reservoirs were at roughly half-capacity this week. Residents must follow a two-day-a-week outdoor watering schedule, trading off based on whether their address numbers are odd or even. One million gallons of water from the city's municipal water systems provides an "initial fill" for a closed-loop system that cools the data center's computers and keeps the water from evaporating. After that initial fill, Oracle expects each of the eight buildings to need another 12,000 gallons per year, which it describes as a "remarkably low figure for a facility of this scale." "These data centers are designed to not use water," Magouyrk said. "All of the data centers that we're building (in) this part of Stargate are designed to not use water. The reason we do that is because it turns out that's harmful for the environment and this is a better solution." The closed-loop system shows that the developer is "taking its impact on local public water supplies seriously," but the overall environmental effect is more nuanced because such systems require more electricity, which also means higher indirect water usage through power generation, said Shaolei Ren, a professor at the University of California, Riverside, who has studied AI's environmental toll. Indeed, the data center complex includes a new gas-fired power plant, using natural gas turbines similar to those that power warships. The companies say the plant is meant to provide backup power for the data halls and is a better option than traditional diesel generators. Most of the power comes from the local grid, sourced from a mix of natural gas with the sprawling wind and solar farms that dot the windy and sunny region. Ren said that "even with emission-reduction measures, the health impacts of essentially turning the data center site into a power plant deserve further study for nearby communities." Arlene Mendler, a Stargate neighbor, said she wished she had more say in the project that eliminated a vast tract of mesquite shrubland, home to coyotes and roadrunners. "It has completely changed the way we were living," said Mendler, who lives across the street. "We moved up here 33 years ago for the peace, quiet, tranquility. After we got home from work, we could ride horses down the road. It was that type of a place." Now, she doesn't know what to do about the constant cacophony of construction sounds or the bright lights that have altered her nighttime views. The project was essentially a done deal once she found out about it. "They took 1,200 acres and just scraped it to bare dirt," said her husband, Fred Mendler. The first time most residents heard of Stargate -- at least by that name -- was when Trump announced the project shortly after returning to the White House in January. Originally planned as a facility to mine cryptocurrency, developers had pivoted and expanded their designs to tailor the project to the AI boom sparked by ChatGPT. The partnership said at that time it was investing $100 billion -- and eventually up to $500 billion -- to build large-scale data centers and the energy generation needed to further AI development. More recently, OpenAI signed a $300 billion deal to buy computing capacity from Oracle. It's a huge bet for the San Francisco-based AI startup, which was founded as a nonprofit. OpenAI and Oracle invited media and politicians, including U.S. Sen. Ted Cruz, a Texas Republican, to tour the site for the first time Tuesday. Cruz called Texas "ground zero for AI" because if "you're building a data center, what do you want? No. 1, you want abundant, low-cost energy." Of the other five Stargate data center projects announced Tuesday, Oracle is working with OpenAI to build one just northeast of Abilene, in Shackelford County, Texas, and another in New Mexico's Doña Ana County. It also said it is working to build one in the Midwest. Softbank said it has broken ground on two more in Lordstown, Ohio, and in Milam County, Texas. The projects offer OpenAI a way to break out from its longtime partnership with Microsoft, which until recently was the startup's exclusive computing partner. Altman told The Associated Press his company has been "severely limited for the value we can offer to people." "ChatGPT is slow. It's not as smart as we'd like to be. Many users can't use it as much as they would like," Altman said. "We have many other ideas and products we want to build." -- -- - The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP's text archives.

OpenAI Envisions 'Producing a Gigawatt of New AI Infrastructure Weekly', says Sam Altman | AIM

The CEO outlined the company's goals involving AI and computing power, as OpenAI announced five new data centre sites as part of the Stargate Project. OpenAI, on September 23, announced five new AI data centre sites, along with Oracle and SoftBank, in the United States. The announcement is part of the Stargate Project, the $500 billion initiative to build AI infrastructure across the US, led by OpenAI and SoftBank in partnership with Oracle, MGX, Arm, Microsoft and NVIDIA. OpenAI states that the combined capacity from these five new sites brings Stargate to nearly 7 gigawatts (GW) of planned capacity, in addition to ongoing projects with CoreWeave. "This puts us on a clear path to securing the full $500 billion, 10-gigawatt commitment we announced in January by the end of 2025, ahead of schedule," the company said. In July, OpenAI and Oracle signed a deal valued at over $300 billion to develop up to 4.5 GW of Stargate capacity within the next five years. This partnership powers three new sites located across the US, which are expected to deliver 5.5 GW of capacity, including a potential expansion of 600 megawatts (MW) near the 'flagship' Stargate site in Abilene, Texas. The three sites are located in Shackelford County, Texas; Doña Ana County, New Mexico; and a site in the Midwest, which is expected to be announced soon. On the other hand, the other two Stargate sites can scale to 1.5 GW of power over the next 18 months. These sites will be developed through a partnership with SoftBank, which is another major partner in the Stargate Project. These two sites are located in Lordstown, Ohio and Milam County, Texas. Recently, OpenAI's CEO, Sam Altman, penned a blog on his personal website, outlining the trajectory of AI and computing power. "Our vision is simple: we want to create a factory that can produce a gigawatt of new AI infrastructure every week," he said, adding that the execution of this will be "extremely difficult" and could take years to get to the milestone. "Maybe with 10 gigawatts of compute, AI can figure out how to cure cancer. Or with 10 gigawatts of compute, AI can figure out how to provide customised tutoring to every student on earth," Altman added. A few days ago, OpenAI and NVIDIA signed a letter of intent for a partnership to deploy at least 10 gigawatts of NVIDIA systems for OpenAI's next-generation AI infrastructure. The agreement includes NVIDIA investing up to $100 billion in OpenAI, contingent upon the deployment of each gigawatt of systems. The first gigawatt of capacity is scheduled for deployment in the second half of 2026 on NVIDIA's Vera Rubin platform.

OpenAI to build five more Stargate data centers in the US with Oracle and SoftBank - SiliconANGLE

OpenAI today announced plans to build five new data center sites in the U.S. as part of its Stargate initiative. Launched in January, Stargate is intended to provide the artificial intelligence provider with 10 gigawatts' worth of computing infrastructure. The project is expected to cost $500 billion over four years. OpenAI is partnering with Oracle Corp. on three of the upcoming data center sites. The facilities will be built in Shackelford County, Texas; Doña Ana County, New Mexico and a yet-unspecified Midwest location. OpenAI plans to share more details about the latter project in the near future. According to the New York Times, Oracle will finance the three data center sites and oversee their construction. The database maker reportedly hopes to cover some of the project's costs through "new kinds of financial deals with various partners." That hints it could bring external investors aboard. The collaboration is part of a $300 billion cloud infrastructure deal that OpenAI signed with Oracle earlier this month. According to the Wall Street Journal, the database maker expects to start generating revenue from the contract in 2027. OpenAI will build the two other data center campuses it previewed today through a partnership with SoftBank Group Corp., one of its largest investors. The Japanese tech giant led a $40 billion round for the ChatGPT developer in March. The first site is located in Lordstown, Ohio. SoftBank broke ground earlier this year and expects to bring the data center online in 2026. The second campus will be developed by the company's SB Energy infrastructure business in Milam County, Texas. OpenAI says that the two sites can be equipped with 1.5 gigawatts' worth of compute infrastructure within 18 months. The facilities will join a data center campus in Abilene, Texas that Oracle started building for the ChatGPT developer earlier this year. OpenAI detailed today the facility's first server racks came online in June. That hardware is already powering AI training and inference workloads. The server racks currently installed in the Abilene site are powered by Nvidia Corp.'s GB200 chip. It combines two Blackwell B200 graphics processing units with a central processing unit. Oracle reportedly expects to install more than 64,000 GB200 chips in the data center by next March. OpenAI will also use newer Nvidia silicon. Earlier this week, it announced plans to adopt the chipmaker's upcoming Vera Rubin chip, which includes an 88-core CPU and a GPU based on the next-generation Rubin architecture. OpenAI disclosed the plan in conjunction with the news that it will raise up to $100 billion from Nvidia to finance data center construction projects. Last month, Nvidia Chief Executive Officer Jensen Huang stated that building one gigawatt of AI infrastructure costs $50 billion to $60 billion. He said that the chipmaker's hardware accounts for well over half that sum. In addition to the five data centers announced today, OpenAI may build a 600-megawatt site near its Abilene campus. The facilities will have a combined power draw of over 5.5 gigawatts. OpenAI expects the projects to create more than 25,000 jobs onsite and tens of thousands more nationwide.

OpenAI, Oracle, and Softbank expand Stargate with five new AI data centers | Fortune

In Abilene, Texas -- in the heart of what locals call the Big Country, long defined by ranching and farming and now dotted with wind turbines -- OpenAI and Oracle staged a carefully crafted media showcase on Tuesday, ushering reporters through an 800-acre data center complex packed with tens of thousands of state-of-the-art Nvidia GPUs. The event was a victory lap of sorts, as CEO Sam Altman and Oracle's new co-CEO Clay Magouryk pushed back against critics who have questioned the progress of their high-profile and ambitious "Stargate" AI infrastructure project. At Tuesday's event, the two companies, joined by Japan's SoftBank, announced a big step forward for Stargate, touting an expansion of the Abilene site, as well as plans to build five massive, new data center complexes across the U.S. over the next several years. Altogether, the initiative calls for hundreds of billions of dollars of investment in a project of a mind-boggling scale. In Abilene, alone a crew of 6,400 workers have already moved massive amounts of soil to flatten the hills, and laid down enough fiber optic cable to wrap the Earth 16 times. "We cannot fall behind in the need to put the infrastructure together to make this revolution happen," OpenAI's Altman said during a Q&A with reporters. "What you saw today is just like a small fraction of what this site will eventually be, and this site is just a small fraction or building, and all of that will still not be enough to serve even the demand of ChatGPT," he said, referring to OpenAI's flagship AI product. The buildout attests to the towering expectations surrounding AI, as tech companies like OpenAI, Alphabet, Microsoft, and Meta race to put in place the infrastructure necessary to power their latest large language models. In July, Meta CEO Mark Zuckerberg said the company would spend hundreds of billions of dollars building a network of data centers with names like Prometheus and Hyperion to create "superintelligence." Abilene, as well as the newly-announced data centers, are all part of the Stargate project, a half-trillion-dollar joint initiative that OpenAI unveiled in January that aims to create a nationwide backbone for training its ever-larger AI models. Stargate has been touted as a public-private partnership with the Trump administration -- part of a bid to keep AI compute infrastructure in the U.S. and push projects past regulatory hurdles. Among the guests and speakers at the Abilene event on Tuesday were Texas Senator Ted Cruz, Congressman Jodey Arrington, and local dignitaries including the mayor of Abilene and even a county judge. Each of them emphasized Texas' appeal as a hub for AI infrastructure. "Sam, Clay, welcome to Silicon Prairie," Arrington said on stage, referring to the CEOs of OpenAI and Oracle. The five new Stargate projects -- in Texas, New Mexico, Ohio, and in an undisclosed Midwest location -- will bring Stargate's current pipeline to nearly 7 gigawatts and more than $400 billion in investment over the next three years. In the data center world, "gigawatts" are shorthand for how much electricity a facility can draw -- and therefore how much AI compute it can deliver. A 1-gigawatt facility, for instance, requires enough substations, cooling, and transmission to sustain the power demand of nearly a million homes. Until recently, the data center facilities owned and operated by the largest cloud computing companies -- the so-called hyperscalers -- topped out at a few hundred megawatts. But Microsoft and Meta have recently unveiled multi-gigawatt projects in Wisconsin and Louisiana. And in a sign of the ever-increasing stakes in AI arms race, OpenAI and its partners promised Tuesday to reach a 10-gigawatt, $500 billion target by the end of 2025 -- ahead of schedule. Oracle pointed out that the campus in Abilene, Texas is already up and running on Oracle Cloud Infrastructure (OCI), continues to progress rapidly, and is on track to provide OpenAI with the "world's largest supercluster" when fully built. Tuesday's announcement included an expansion in Abilene on another site which will draw 600 megawatts - which could power roughly 450,000-600,000 homes' worth of electricity demand. The new projects -- in Texas, New Mexico, Ohio, and in an undisclosed Midwest location -- will bring Stargate's current pipeline to nearly 7 gigawatts and more than $400 billion in investment over the next three years. That kind of capacity, which can power millions of homes, is measured in power-plant terms: a typical hyperscale cloud campus runs a few hundred megawatts, while Microsoft and Meta have each announced multi-gigawatt projects in Wisconsin and Louisiana. Three of the new sites -- in Shackelford County, Texas; Doña Ana County, New Mexico; and an undisclosed Midwestern location -- will be built with Oracle, expanding a July deal to develop up to 4.5 gigawatts of capacity worth more than $300 billion over five years. Two others -- in Lordstown, Ohio, and Milam County, Texas -- will be developed with SoftBank, which has promised "fast-build" facilities that can scale quickly to multiple gigawatts. The five sites emerged from a January site-selection contest that drew more than 300 proposals from 30 states, underscoring how aggressively local governments courted the Stargate project. But Stargate's expansion is certain to draw criticism on multiple fronts. In Abilene and other communities hosting mega AI data centers, residents and activists worry about the trade-offs: billions in tax abatements, the risk of gas-fired generation worsening local air quality, and the likelihood that permanent jobs will number far fewer than the headlines suggest. National energy analysts, meanwhile, warn that multi-gigawatt campuses could strain fragile power grids and lock in huge new demands for water and fossil fuels at a time when utilities are already struggling to keep up with AI's growth. For example, the site in Dona Ana County, New Mexico has garnered mixed reactions, with opponents raising concerns about water usage and pollution, arguing these issues outweigh the economic benefits. According to a county presentation, the project will bring 800 permanent jobs and 2,500 construction jobs over three years. Yesterday, Nvidia announced a letter of intent with OpenAI to deploy GPU-powered systems capable of drawing up to 10 gigawatts of electricity -- the equivalent demand of 7 to 10 million homes -- backed by as much as $100 billion in investment. Altman argued at the press Q&A that the most significant piece of Nvidia's announcement wasn't just the new sites but the financing model behind them. Rather than paying billions for chips up front, OpenAI will be able to spread those costs over time as revenue scales. "We can kind of like pay as we go, like what's on cloud services," he said. "the chips are a humongous percentage of the capex, and it's harder for us to pay for that all up front, because our revenue comes in over the many months that customers run service among those chips. So that really helps projects like this." But when it came to OpenAI's energy demands, Senator Ted Cruz cast the stakes in both geopolitical and local terms. "Message number one: America will beat China in the race for AI," he said. Message number two? "Texas is ground zero for AI," he added. "What do you want when you're building AI data centers? Number one, you want abundant, low-cost energy. Welcome to the great state of Texas."

OpenAI shows off Stargate AI data center in Texas and plans 5 more elsewhere with Oracle, Softbank

ABILENE, Texas -- The afternoon sun was so hot that OpenAI CEO Sam Altman traded his usual crewneck sweater for a T-shirt on the last legs of a Tuesday visit to the massive Stargate artificial intelligence data center complex that will power the future of ChatGPT. OpenAI announced Tuesday that its flagship AI data center in Texas will be joined by five others around the U.S. as the ChatGPT maker aims to make good on the $500 billion infrastructure investment promoted by President Donald Trump earlier this year. Stargate, a joint venture between OpenAI, Oracle and Softbank, said it is building two more data center complexes in Texas, one in New Mexico, one in Ohio and another in a Midwest location it hasn't yet disclosed. But it's the project in Abilene, Texas, that promised to be the biggest of them all, transforming what the city's mayor called an old railroad town. Oracle executives visiting the eight-building complex said it is already on track to be the world's largest AI supercluster once fully built, a reference to its network of hundreds of thousands of AI computer chips that will be running in its H-shaped buildings. Altman said, "When you hit that button on ChatGPT, you really don't -- I don't, at least" -- think about what happens inside the data halls used to build and operate the chatbot. He and Oracle's new co-CEO Clay Magouyrk also sought to emphasize the steps they've taken to reduce the energy-hungry complex's environmental effects on a drought-prone region of West Texas, where temperatures hit 97 degrees Fahrenheit (36 degrees Celsius) on Tuesday. "We're burning gas to run this data center," said Altman, but added that "in the long trajectory of Stargate" the hope is to rely on many other power sources. The complex will require about 900 megawatts of electricity to power the eight buildings. One is already operating, and a second that Altman and Magouyrk visited Tuesday is nearly complete. Each server rack in those buildings holds 72 of Nvidia's GB200 chips, which are specially designed for the most intensive AI workloads. Each building is expected to have about 60,000 of them. More than 6,000 workers now commute to the massive construction project each day, in what Mayor Weldon Hurt described as a significant boost to the local economy. The campus and nearby expansion will provide nearly 1,700 jobs onsite when fully operational, Oracle said, with "thousands more indirect jobs" predicted to be created. Hand-made signs lining the roads to the facility advertise "move-in-ready" homes for workers. "AI WORKERS? HUGE DISCOUNTS" says one promising homes with one to six bedrooms. But Hurt also acknowledged that residents have mixed feelings about the project due to its water and energy needs. The city's chronically stressed reservoirs were at roughly half-capacity this week. Residents must follow a two-day-a-week outdoor watering schedule, trading off based on whether their address numbers are odd or even. One million gallons of water from the city's municipal water systems provides an "initial fill" for a closed-loop system that cools the data center's computers and keeps the water from evaporating. After that initial fill, Oracle expects each of the eight buildings to need another 12,000 gallons per year, which it describes as a "remarkably low figure for a facility of this scale." "These data centers are designed to not use water," Magouyrk said. "All of the data centers that we're building (in) this part of Stargate are designed to not use water. The reason we do that is because it turns out that's harmful for the environment and this is a better solution." The closed-loop system shows that the developer is "taking its impact on local public water supplies seriously," but the overall environmental effect is more nuanced because such systems require more electricity, which also means higher indirect water usage through power generation, said Shaolei Ren, a professor at the University of California, Riverside, who has studied AI's environmental toll. Indeed, the data center complex includes a new gas-fired power plant, using natural gas turbines similar to those that power warships. The companies say the plant is meant to provide backup power for the data halls and is a better option than traditional diesel generators. Most of the power comes from the local grid, sourced from a mix of natural gas with the sprawling wind and solar farms that dot the windy and sunny region. Ren said that "even with emission-reduction measures, the health impacts of essentially turning the data center site into a power plant deserve further study for nearby communities." Arlene Mendler, a Stargate neighbor, said she wished she had more say in the project that eliminated a vast tract of mesquite shrubland, home to coyotes and roadrunners. "It has completely changed the way we were living," said Mendler, who lives across the street. "We moved up here 33 years ago for the peace, quiet, tranquility. After we got home from work, we could ride horses down the road. It was that type of a place." Now, she doesn't know what to do about the constant cacophony of construction sounds or the bright lights that have altered her nighttime views. The project was essentially a done deal once she found out about it. "They took 1,200 acres and just scraped it to bare dirt," said her husband, Fred Mendler. The first time most residents heard of Stargate -- at least by that name -- was when Trump announced the project shortly after returning to the White House in January. Originally planned as a facility to mine cryptocurrency, developers had pivoted and expanded their designs to tailor the project to the AI boom sparked by ChatGPT. The partnership said at that time it was investing $100 billion -- and eventually up to $500 billion -- to build large-scale data centers and the energy generation needed to further AI development. More recently, OpenAI signed a $300 billion deal to buy computing capacity from Oracle. It's a huge bet for the San Francisco-based AI startup, which was founded as a nonprofit. OpenAI and Oracle invited media and politicians, including U.S. Sen. Ted Cruz, a Texas Republican, to tour the site for the first time Tuesday. Cruz called Texas "ground zero for AI" because if "you're building a data center, what do you want? No. 1, you want abundant, low-cost energy." Of the other five Stargate data center projects announced Tuesday, Oracle is working with OpenAI to build one just northeast of Abilene, in Shackelford County, Texas, and another in New Mexico's Doña Ana County. It also said it is working to build one in the Midwest. Softbank said it has broken ground on two more in Lordstown, Ohio, and in Milam County, Texas. The projects offer OpenAI a way to break out from its longtime partnership with Microsoft, which until recently was the startup's exclusive computing partner. Altman told The Associated Press his company has been "severely limited for the value we can offer to people." "ChatGPT is slow. It's not as smart as we'd like to be. Many users can't use it as much as they would like," Altman said. "We have many other ideas and products we want to build." -- -- - The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP's text archives.

OpenAI and Oracle show off Stargate AI data center in Texas and plan five more elsewhere

ABILENE, Texas (AP) -- The afternoon sun was so hot that OpenAI CEO Sam Altman traded his usual sweater for a T-shirt on the last legs of a Tuesday visit to the massive Stargate artificial intelligence data center complex that will power the future of ChatGPT. Altman announced Tuesday that OpenAI's flagship artificial AI data center in Texas will be joined by five others around the U.S. as the ChatGPT maker aims to make good on the $500 billion infrastructure investment promoted by President Donald Trump earlier this year. Stargate, a joint venture between OpenAI, Oracle and Softbank, said it is building two more data center complexes in Texas, one in New Mexico, one in Ohio and another in a Midwest location it hasn't yet disclosed. But it's the project in Abilene, Texas, that promised to be the biggest of them all, transforming what the city's mayor called an old railroad town. Oracle executives who visited the eight-building complex said it is already on track to be the world's largest AI supercluster once fully built, a reference to the hundreds of thousands of AI chips that will be running in its massive, H-shaped buildings. Altman said, "When you hit that button on ChatGPT, you really don't -- I don't, at least" -- think about what happens inside the data halls used to build and operate the chatbot. He and Oracle's new co-CEO Clay Magouyrk also sought to emphasize the steps they've taken to reduce the complex's environmental effects on a drought-prone region of West Texas, where temperatures hit 97 degrees Fahrenheit (36 degrees Celsius) on Tuesday. The complex will require about 900 megawatts of electricity to power the eight buildings, running hundreds of thousands of specialized AI chips. For the first building, each server rack holds 72 of Nvidia's GB200 chips, which are specially designed for the most intensive AI workloads. Each building has about 60,000 of them. One of the buildings is already operating, and a second that Altman and Magouyrk visited Tuesday is nearly complete. OpenAI and Oracle invited media and politicians, including U.S. Sen. Ted Cruz, a Texas Republican, to tour the site for the first time Tuesday. "Texas is ground zero for AI," Cruz said. Trump touted Stargate shortly after returning to the White House in January. The partnership said at that time it was investing $100 billion -- and eventually up to $500 billion -- to build large-scale data centers and the energy generation needed to further AI development. Trump called the project a "resounding declaration of confidence in America's potential" under his new administration, though construction on the flagship project in Abilene began last year and had been in planning for years before that. Originally developed to mine cryptocurrency, developers pivoted and expanded their designs to tailor the project to the AI boom sparked by ChatGPT. More than 6,000 workers now commute to the massive construction project each day, in what Mayor Weldon Hurt described as a significant boost to the local economy. "AI WORKERS? HUGE DISCOUNTS" says one hand-made sign for "move-in ready" homes of one to six bedrooms. But Hurt also acknowledged that residents have mixed feelings about the project due to its water and energy effects. The city's chronically stressed reservoirs were at roughly half-capacity on Monday. Residents must follow a two-day-a-week outdoor watering schedule, trading off based on whether their address numbers are odd or even. One million gallons of water from the city's municipal water systems provides an "initial fill" for a closed-loop system that cools the data center's computers, reducing the amount that evaporates. After that initial fill, Oracle expects each of the eight buildings to need another 12,000 gallons per year, which it describes as a "remarkably low figure for a facility of this scale." "These data centers are designed to not use water," Magouyrk said. "All of the data centers that we're building (in) this part of Stargate are designed to not use water. The reason we do that is because it turns out that's harmful for the environment and this is a better solution." The closed-loop system shows that the developer is "taking its impact on local public water supplies seriously," but the overall environmental effect is more nuanced because such systems require more electricity, which also means higher indirect water usage through power generation, said Shaolei Ren, a professor at the University of California, Riverside, who has studied AI's environmental toll. Indeed, the data center complex includes a new gas-fired power plant, using natural gas turbines similar to those that power warships. The companies say the plant is meant to provide backup power for the data halls and is a better option than traditional diesel generators. Most of the power comes from the local grid, which includes a mix of gas with the sprawling wind and solar farms that dot the region. Ren said that "even with emission-reduction measures, the health impacts of essentially turning the data center site into a power plant deserve further study for nearby communities." Arlene Mendler, a Stargate neighbor, said she wished she had more say in the project. "It has completely changed the way we were living," said Mendler, who lives across the street. "We moved up here 33 years ago for the peace, quiet, tranquility. After we got home from work, we could ride horses down the road. It was that type of a place." Now, she doesn't know what to do about the constant cacophony of construction sounds or the bright lights that have altered her nighttime views. The project was essentially a done deal once she found out about it. "They took 1,200 acres and just scraped it to bare dirt," said her husband, Fred Mendler. -- -- - The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP's text archives.

OpenAI and Oracle Show off Stargate AI Data Center in Texas and Plan Five More Elsewhere

ABILENE, Texas (AP) -- The afternoon sun was so hot that OpenAI CEO Sam Altman traded his usual sweater for a T-shirt on the last legs of a Tuesday visit to the massive Stargate artificial intelligence data center complex that will power the future of ChatGPT. Altman announced Tuesday that OpenAI's flagship artificial AI data center in Texas will be joined by five others around the U.S. as the ChatGPT maker aims to make good on the $500 billion infrastructure investment promoted by President Donald Trump earlier this year. Stargate, a joint venture between OpenAI, Oracle and Softbank, said it is building two more data center complexes in Texas, one in New Mexico, one in Ohio and another in a Midwest location it hasn't yet disclosed. But it's the project in Abilene, Texas, that promised to be the biggest of them all, transforming what the city's mayor called an old railroad town. Oracle executives who visited the eight-building complex said it is already on track to be the world's largest AI supercluster once fully built, a reference to the hundreds of thousands of AI chips that will be running in its massive, H-shaped buildings. Altman said, "When you hit that button on ChatGPT, you really don't -- I don't, at least" -- think about what happens inside the data halls used to build and operate the chatbot. He and Oracle's new co-CEO Clay Magouyrk also sought to emphasize the steps they've taken to reduce the complex's environmental effects on a drought-prone region of West Texas, where temperatures hit 97 degrees Fahrenheit (36 degrees Celsius) on Tuesday. The complex will require about 900 megawatts of electricity to power the eight buildings, running hundreds of thousands of specialized AI chips. For the first building, each server rack holds 72 of Nvidia's GB200 chips, which are specially designed for the most intensive AI workloads. Each building has about 60,000 of them. One of the buildings is already operating, and a second that Altman and Magouyrk visited Tuesday is nearly complete. OpenAI and Oracle invited media and politicians, including U.S. Sen. Ted Cruz, a Texas Republican, to tour the site for the first time Tuesday. "Texas is ground zero for AI," Cruz said. Trump touted Stargate shortly after returning to the White House in January. The partnership said at that time it was investing $100 billion -- and eventually up to $500 billion -- to build large-scale data centers and the energy generation needed to further AI development. Trump called the project a "resounding declaration of confidence in America's potential" under his new administration, though construction on the flagship project in Abilene began last year and had been in planning for years before that. Originally developed to mine cryptocurrency, developers pivoted and expanded their designs to tailor the project to the AI boom sparked by ChatGPT. More than 6,000 workers now commute to the massive construction project each day, in what Mayor Weldon Hurt described as a significant boost to the local economy. "AI WORKERS? HUGE DISCOUNTS" says one hand-made sign for "move-in ready" homes of one to six bedrooms. But Hurt also acknowledged that residents have mixed feelings about the project due to its water and energy effects. The city's chronically stressed reservoirs were at roughly half-capacity on Monday. Residents must follow a two-day-a-week outdoor watering schedule, trading off based on whether their address numbers are odd or even. One million gallons of water from the city's municipal water systems provides an "initial fill" for a closed-loop system that cools the data center's computers, reducing the amount that evaporates. After that initial fill, Oracle expects each of the eight buildings to need another 12,000 gallons per year, which it describes as a "remarkably low figure for a facility of this scale." "These data centers are designed to not use water," Magouyrk said. "All of the data centers that we're building (in) this part of Stargate are designed to not use water. The reason we do that is because it turns out that's harmful for the environment and this is a better solution." The closed-loop system shows that the developer is "taking its impact on local public water supplies seriously," but the overall environmental effect is more nuanced because such systems require more electricity, which also means higher indirect water usage through power generation, said Shaolei Ren, a professor at the University of California, Riverside, who has studied AI's environmental toll. Indeed, the data center complex includes a new gas-fired power plant, using natural gas turbines similar to those that power warships. The companies say the plant is meant to provide backup power for the data halls and is a better option than traditional diesel generators. Most of the power comes from the local grid, which includes a mix of gas with the sprawling wind and solar farms that dot the region. Ren said that "even with emission-reduction measures, the health impacts of essentially turning the data center site into a power plant deserve further study for nearby communities." Arlene Mendler, a Stargate neighbor, said she wished she had more say in the project. "It has completely changed the way we were living," said Mendler, who lives across the street. "We moved up here 33 years ago for the peace, quiet, tranquility. After we got home from work, we could ride horses down the road. It was that type of a place." Now, she doesn't know what to do about the constant cacophony of construction sounds or the bright lights that have altered her nighttime views. The project was essentially a done deal once she found out about it. "They took 1,200 acres and just scraped it to bare dirt," said her husband, Fred Mendler. -- -- - The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP's text archives.

OpenAI's $850 Billion Build-Out Needs Power Of 17 Nuclear Plants - Oracle (NYSE:ORCL)

OpenAI has plans for an enormous $850 billion expansion, constructing data centers that will require as much energy as 17 nuclear facilities to fulfill the explosive demand for AI tools. Check out ORCL stock here. Massive Energy Needs & Price Tag CEO Sam Altman described the scale and pace as ambitious, yet potentially too slow given how rapidly AI adoption is growing. Altman revealed to CNBC the massive scale of OpenAI's infrastructure plan, which matches the energy output of nine Hoover Dams and would power over 13 million American homes. Read Next: Rigetti, D-Wave, IonQ Set To Disrupt Everything -- Expert Goes All In The infrastructure projects involve partnerships with Oracle Corp. (NYSE: ORCL), NVIDIA Corp. (NASDAQ: NVDA) and SoftBank. Each data center comes with a $50 billion price tag, with a cumulative spend of about $850 billion -- a figure that matches almost half the global investment in AI infrastructure, according to HSBC. Altman acknowledged the concerns about such massive spending, but he rejected the idea it is excessive and insisted OpenAI's rapid progress is driving the necessity for supercomputing networks. AI Bubble? Some skeptics are warning about a potential financial bubble, as companies engaged with OpenAI have seen their valuations soar. OpenAI CFO Sarah Friar emphasized that tech companies are joining forces to address a significant shortage of computing power, as the current infrastructure cannot satisfy the needs of modern AI systems. Investors fear a circular financing situation, since these businesses invest in each other's projects and receive payments for hardware and services. Friar sees the situation differently, arguing that coordinated, large-scale investment has always accompanied technological breakthroughs. Oracle's commitment to AI is reflected in its new leadership, and Nvidia is contributing both capital and advanced chips to the effort. Friar said that OpenAI will pay operational costs once the centers are running, while partners like Nvidia profit as equipment is deployed. The current focus is on bringing new facilities online next year, with further expansion scheduled through the end of the decade. Read Next: Amazon Will Pay $2.5 Billion In FTC Lawsuit -- One Of The Largest Settlements In History Photo: Meir Chaimowitz via Shutterstock. ORCLOracle Corp$294.85-4.41%OverviewNVDANVIDIA Corp$177.280.18%Market News and Data brought to you by Benzinga APIs

The AI Boom's Second Act: Debt-Fueled Growth | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. The most visible example is OpenAI and Oracle's $300 billion contract. According to the Wall Street Journal, to deliver, Oracle must invest heavily up front. KeyBanc analysts estimate the company may need to borrow roughly $25 billion annually over the next four years. Oracle already carried about $82 billion of long-term debt as of August and had a debt-to-equity ratio of nearly 450%, far higher than Alphabet's 11.5% and Microsoft's ~33%. Nebius struck a $19.4 billion deal to supply Microsoft and said it would fund the build with cash flow and debt, while CoreWeave has relied on creative financing to climb the ranks of AI compute providers. Oracle's stock jumped after the OpenAI contract was disclosed, an investor vote of confidence despite years of expected cash burn. The wager is that demand will catch up. But the liabilities are large and the timelines tight. Moody's flagged significant risks tied to equipment, land and power costs and gave Oracle a negative outlook in July. Analysts note OpenAI would need to scale to more than $300 billion in annual revenue by 2030 from about $12 billion today to justify the spending tied to the Oracle pact. Consumer willingness to pay remains limited, and contracts could be postponed, renegotiated or reassigned if usage lags. Oracle could, in theory, lease capacity to another buyer if OpenAI falters, but the financing model is getting "bubblier by the day," Wall Street Journal reports. For now, the debt taps are open because equity has been plentiful and momentum remains strong. PYMNTS reporting shows AI captured 42% of U.S. venture capital in 2024, up from 36% in 2023 and 22% in 2022. That continued into this year: AI startups raised $104.3 billion in the first half of 2025, according to PitchBook data. But venture money alone won't fund the infrastructure build. Private credit is stepping in: the AI boom represents as much as a $1.8 trillion opportunity for non-bank lenders by decade's end, according to Carlyle estimates reported by PYMNTS. UBS strategists warn that private credit to tech swelled by roughly $100 billion in the past year to $450 billion. Individual operators are tapping those markets directly; Nvidia-backed Lambda recently closed a $275 million credit facility to expand AI data centers and GPU fleets. If debt becomes the decisive input, the winners in foundation model training may be those with the cheapest capital and the strongest balance sheets. That could entrench a small set of compute landlords and model providers and make the cadence of model upgrades more sensitive to credit conditions. Should funding tighten, providers might ration training runs, slow parameter growth or prioritize paying customers over research, choices that could affect the pace and openness of LLM progress. Borrowing-driven build-outs are ultimately repaid through pricing. Enterprises may face higher or more variable AI service costs, along with vendor concentration risk if a large provider must renegotiate capacity or refinance. Many CFOs are already scrutinizing ROI; PYMNTS reporting finds typical corporate AI deployments run from $50,000 to $500,000 for practical use cases, with large programs stretching into the millions. That spend is contributing to a projected 9% rise in global IT outlays this year, led by AI and cloud. Debt can accelerate the AI infrastructure race, but it also adds fragility. For banks, lenders and corporate adopters, the key questions now are less about model accuracy and more about balance sheet durability, who is financing the compute behind the demo, on what terms, and how those obligations might shape the availability and price of enterprise AI over the next cycle.

OpenAI, Oracle, SoftBank Unveil $500 Billion Stargate Plan With 5 New US AI Data Centers As Nvidia Commits $100 Billion To Support ChatGPT-Parent - Oracle (NYSE:ORCL)

OpenAI, Oracle Corp ORCL and SoftBank Group SFTBF SFTBY on Tuesday announced plans to build five new U.S. data centers as part of the $500 billion Stargate project, a massive private-sector effort to power the next wave of artificial intelligence. Five Sites Across the US OpenAI said it will expand with Oracle at three locations: Shackelford County, Texas; Dona Ana County, New Mexico and an undisclosed site in the Midwest. Two additional data centers in Lordstown, Ohio and Milam County, Texas, will be built in partnership with SoftBank and a SoftBank affiliate. The new builds are expected to create about 25,000 onsite jobs, the company said. Together with ongoing projects in Abilene, Texas and other partnerships, Stargate's total capacity is set to approach seven gigawatts, representing more than $400 billion in investment over the next three years. The long-term goal is 10 gigawatts. See Also: Apple Inc. Emphasizes Design Commitment Amidst High-Profile Exits Altman: AI Can Only Fulfill Its Promise If We Build the Compute "AI can only fulfill its promise if we build the compute to power it. That compute is the key to ensuring everyone can benefit from AI and to unlocking future breakthroughs," OpenAI CEO Sam Altman said in a statement shared by the company. Clay Magouyrk, CEO of Oracle, said the company's AI infrastructure -- designed for reliability, scalability, and security -- is enabling OpenAI to grow quickly. Masayoshi Son, chairman and CEO of SoftBank Group, said the company is leveraging its data center design and energy expertise through Stargate to provide the scalable compute needed to power the future of AI. The Stargate initiative was first unveiled in January during a White House meeting with President Donald Trump and top tech CEOs. With AI central to both national security and global competition, the administration has championed the project as a way to cement U.S. leadership over rivals such as China. Nvidia's $100 Billion Commitment The announcement came a day after Nvidia revealed plans to invest up to $100 billion in OpenAI, providing advanced chips to support Stargate's rollout. The chipmaker will help deploy 10 gigawatts of Nvidia-powered systems to handle AI training and inference. Gene Munster of DeepWater Asset Management called Nvidia's deal a pivotal moment in the AI arms race, noting it will pressure rivals like Meta Platforms, Inc. META, Amazon.com, Inc. AMZN, Alphabet Inc. GOOG GOOGL and Microsoft Corporartion MSFT to ramp up capital spending. Price Action: Oracle shares fell 4.36% on Tuesday, while Nvidia stock slipped 2.82%, according to Benzinga Pro. Benzinga's Edge Stock Rankings show that ORCL continues to trend upward across short, medium and long-term periods, with further performance insights available here. Read Next: Apple May See Fewer Searches In Safari, But Google CEO Sundar Pichai Insists AI Is Fueling Overall Query Growth: 'Far From A Zero-Sum Game' Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. ORCLOracle Corp$315.000.37%OverviewAMZNAmazon.com Inc$222.400.77%GOOGAlphabet Inc$252.740.16%GOOGLAlphabet Inc$252.190.21%METAMeta Platforms Inc$758.170.37%MSFTMicrosoft Corp$509.930.14%SFTBFSoftBank Group Corp$107.63-13.7%SFTBYSoftBank Group Corp$61.62-%Market News and Data brought to you by Benzinga APIs

OpenAI and Oracle show off Stargate AI data centre in Texas and plan five more elsewhere

ABILENE, Texas -- The afternoon sun was so hot that OpenAI CEO Sam Altman traded his usual sweater for a T-shirt on the last legs of a Tuesday visit to the massive Stargate artificial intelligence data centre complex that will power the future of ChatGPT. Altman announced Tuesday that OpenAI's flagship artificial AI data centew in Texas will be joined by five others around the U.S. as the ChatGPT maker aims to make good on the US$500 billion infrastructure investment promoted by U.S. President Donald Trump earlier this year. Stargate, a joint venture between OpenAI, Oracle and Softbank, said it is building two more data centre complexes in Texas, one in New Mexico, one in Ohio and another in a Midwest location it hasn't yet disclosed. But it's the project in Abilene, Texas, that promised to be the biggest of them all, transforming what the city's mayor called an old railroad town. Oracle executives who visited the eight-building complex said it is already on track to be the world's largest AI supercluster once fully built, a reference to the hundreds of thousands of AI chips that will be running in its massive, H-shaped buildings. Altman said, "When you hit that button on ChatGPT, you really don't -- I don't, at least" -- think about what happens inside the data halls used to build and operate the chatbot. He and Oracle's new co-CEO Clay Magouyrk also sought to emphasize the steps they've taken to reduce the complex's environmental effects on a drought-prone region of West Texas, where temperatures hit 97 degrees Fahrenheit (36 degrees Celsius) on Tuesday. The complex will require about 900 megawatts of electricity to power the eight buildings, running hundreds of thousands of specialized AI chips. For the first building, each server rack holds 72 of Nvidia's GB200 chips, which are specially designed for the most intensive AI workloads. Each building has about 60,000 of them. One of the buildings is already operating, and a second that Altman and Magouyrk visited Tuesday is nearly complete. OpenAI and Oracle invited media and politicians, including U.S. Sen. Ted Cruz, a Texas Republican, to tour the site for the first time Tuesday. "Texas is ground zero for AI," Cruz said. Trump touted Stargate shortly after returning to the White House in January. The partnership said at that time it was investing US$100 billion -- and eventually up to US$500 billion -- to build large-scale data centres and the energy generation needed to further AI development. Trump called the project a "resounding declaration of confidence in America's potential" under his new administration, though construction on the flagship project in Abilene began last year and had been in planning for years before that. Originally developed to mine cryptocurrency, developers pivoted and expanded their designs to tailor the project to the AI boom sparked by ChatGPT. More than 6,000 workers now commute to the massive construction project each day, in what Mayor Weldon Hurt described as a significant boost to the local economy. "AI WORKERS? HUGE DISCOUNTS" says one hand-made sign for "move-in ready" homes of one to six bedrooms. But Hurt also acknowledged that residents have mixed feelings about the project due to its water and energy effects. The city's chronically stressed reservoirs were at roughly half-capacity on Monday. Residents must follow a two-day-a-week outdoor watering schedule, trading off based on whether their address numbers are odd or even. One million gallons of water from the city's municipal water systems provides an "initial fill" for a closed-loop system that cools the data centre's computers, reducing the amount that evaporates. After that initial fill, Oracle expects each of the eight buildings to need another 12,000 gallons per year, which it describes as a "remarkably low figure for a facility of this scale." "These data centres are designed to not use water," Magouyrk said. "All of the data centres that we're building (in) this part of Stargate are designed to not use water. The reason we do that is because it turns out that's harmful for the environment and this is a better solution." The closed-loop system shows that the developer is "taking its impact on local public water supplies seriously," but the overall environmental effect is more nuanced because such systems require more electricity, which also means higher indirect water usage through power generation, said Shaolei Ren, a professor at the University of California, Riverside, who has studied AI's environmental toll. Indeed, the data centre complex includes a new gas-fired power plant, using natural gas turbines similar to those that power warships. The companies say the plant is meant to provide backup power for the data halls and is a better option than traditional diesel generators. Most of the power comes from the local grid, which includes a mix of gas with the sprawling wind and solar farms that dot the region. Ren said that "even with emission-reduction measures, the health impacts of essentially turning the data centre site into a power plant deserve further study for nearby communities." Arlene Mendler, a Stargate neighbour, said she wished she had more say in the project. "It has completely changed the way we were living," said Mendler, who lives across the street. "We moved up here 33 years ago for the peace, quiet, tranquility. After we got home from work, we could ride horses down the road. It was that type of a place." Now, she doesn't know what to do about the constant cacophony of construction sounds or the bright lights that have altered her nighttime views. The project was essentially a done deal once she found out about it. "They took 1,200 acres and just scraped it to bare dirt," said her husband, Fred Mendler.

OpenAI, under pressure to meet demand, widens scope of Stargate and eyes debt to finance chips

ABILENE, Texas/NEW YORK -At the White House this year, OpenAI outlined its lofty "Stargate" infrastructure project that would cost half a trillion dollars and be developed with partners including SoftBank and Oracle. Now, after some fits and starts, OpenAI executives say the joint venture is far more expansive than previously outlined and involves almost everything OpenAI does related to artificial intelligence chips and data centers. Stargate was initially conceived as a new company that would invest $500 billion in AI infrastructure. Now OpenAI executives say the parameters have expanded to include data center projects launched months before Stargate was announced. OpenAI, best known for its ChatGPT chatbot, argues that the AI revolution needs computing systems like Stargate to deliver on its immense promise. OpenAI will pursue different creative financing options, some of which have only emerged within the last year, to secure chips for the data centers, the executives added. CEO Sam Altman has repeatedly said that creating data centers is the key to progress, writing in a blog on Tuesday that he eventually aimed to get to the point of building a gigawatt of new AI infrastructure every week. Expanding chip availability was also the key idea behind the announcement of Stargate in January. The initial vision for Stargate, however, ran into delays, executives said. Protracted negotiations with other parties and decisions on locations have bogged down the process, SoftBank's Chief Financial Officer Yoshimitsu Goto said last month. The sweep of projects in OpenAI's expanded vision all have the same goal: to help meet significant demand for its AI tools. "We cannot fall behind in the need to put the infrastructure together to make this revolution happen," Altman said on Tuesday at a briefing with reporters, tech executives and politicians, including U.S. Senator Ted Cruz, and newly named Oracle co-CEO Clay Magouyrk. The briefing was held at a massive data center in Abilene, Texas, where OpenAI and its partners are rapidly building a data center. Despite widespread expectations that AI will fundamentally change the world, investors have voiced substantial concern about a potential bubble from building too quickly. Altman acknowledged those concerns while remaining optimistic. "There will be a lot of short-term ups and downs, day-to-day quarter, whatever," he said. "You zoom out enough and the charts look like this," he said, gesturing with his hands sloping upwards. A new partnership of up to $100 billion with Nvidia announced on Monday is part of the project. OpenAI plans to use an initial $10 billion in cash from the chipmaker to secure additional funding to use its products. OpenAI estimates that leasing instead of buying chips could save the company 10-15%, a person familiar with the matter said. Executives familiar with Stargate said it would help OpenAI tap debt markets for future sites. Stargate's projects will not include some companies, including longtime sponsor Microsoft, executives said. OpenAI negotiated terms with Microsoft to enable working with multiple partners. THE INDUSTRY'S LIFEBLOOD Computational resources, or "compute" in industry parlance, are the lifeblood of the AI industry. OpenAI executives have said for years that the company is significantly short on compute required to power its services, especially ChatGPT, and develop new tools. Just this week, OpenAI decided to delay launching a product outside the United States due to a lack of compute, people close to Stargate said. OpenAI would like to quickly minimize such trade-offs, they added. On Tuesday, OpenAI, Oracle and SoftBank unveiled plans for five new U.S. AI data centers for Stargate. These include three sites with Oracle, two affiliated with SoftBank and expansion of an Oracle site in Abilene, Texas. Altogether, OpenAI's projects account for nearly 7 gigawatts of the 10 gigawatts of compute initially envisioned for Stargate. Abilene, dubbed the flagship Stargate project, has been under construction for more than a year by Oracle and AI startup Crusoe. The site spans 1,100 acres (445 hectares) and employs thousands of construction workers. Cranes and hydraulic platforms are spread across the campus, with some hoisting American and Texan flags. The facility also includes fiber cable long enough to stretch from the earth to the moon and back. Stargate projects also include initiatives for OpenAI to build data centers on its own or with partners. DEBT FINANCING AND NVIDIA BACKING After announcing Stargate in January, OpenAI held hundreds of meetings across North America with potential partners that could provide land, power and other resources. "It was a flood of people," one executive said. The expanded Stargate plan now includes self-built data centers and third-party cloud capacity. The new Nvidia deal is part of this broader strategy that allows OpenAI to pay for its chips over time, rather than purchasing them outright. Of the roughly $50 billion estimated value of a new data center, about $15 billion covers land, buildings and standard equipment. Financing the GPU chips is more challenging due to shortages and uncertainty over the life of the chips in a fast-changing new industry. Meta tapped U.S. investment manager PIMCO and alternative asset manager Blue Owl Capital to lead a $29 billion financing for its data center expansion in rural Louisiana, Reuters reported earlier this month. This reflects a broader trend of massive data centers operated by cloud service providers, called hyperscalers, turning to outside financing to help cover the rising costs of building and powering centers for generative AI. Companies rated below investment grade normally face higher costs when raising debt. Nvidia's equity backing gives lenders confidence in OpenAI, executives said. OpenAI has not yet drawn on debt financing but plans to for future builds. The buildout pace is limited by supply chain bottlenecks and GPU availability, executives familiar with Stargate said. Site configurations vary, and most workloads currently focus on reasoning tasks, so low-latency optimization is less critical. (Reporting by Deepa Seetharaman in Abeline, Texas, Echo Wang in New York; Editing by Peter Henderson and Richard Chang) By Deepa Seetharaman and Echo Wang

OpenAI, Oracle, SoftBank plan five new AI data centers for $500 billion Stargate project

ABILENE, Texas (Reuters) -OpenAI, Oracle and SoftBank on Tuesday announced plans for five new artificial intelligence data centers in the United States to build out their ambitious Stargate project. U.S. President Donald Trump in January hosted top tech CEOs to launch Stargate, a private-sector initiative that plans to spend up to $500 billion to build AI infrastructure. AI is a priority for Trump and tech companies that are pouring billions into building the computers that are necessary to power the technology. ChatGPT-maker OpenAI said on Tuesday it will open three new sites with Oracle in Shackelford County, Texas, Dona Ana County, New Mexico and an undisclosed site in the Midwest. Two more data center sites will be built in Lordstown, Ohio and Milam County, Texas by OpenAI, Japan's SoftBank and a SoftBank affiliate. The new sites, the Oracle-OpenAI site expansion in Abilene, Texas, and the ongoing projects with CoreWeave will bring Stargate's total data center capacity to nearly 7 gigawatts and more than $400 billion in investment over the next three years, OpenAI said. The $500 billion project was intended to generate 10 gigawatts in total data center capacity. "AI can only fulfill its promise if we build the compute to power it," OpenAI CEO Sam Altman said in a statement. The Tuesday's announcement, expected to create 25,000 onsite jobs, follows Nvidia saying on Monday that it will invest up to $100 billion in OpenAI and supply data center chips. OpenAI and partners plan to use debt financing to lease chips for the Stargate project, people familiar with the matter said. OpenAI and its backer Microsoft are among the tech giants pouring billions into data centers to power generative AI services such as ChatGPT and Copilot. AI's role in sensitive sectors such as defense and China's push to catch up have made the nascent technology a top priority for Trump. (Reporting by Nilutpal Timsina and Angela Christy in Bengaluru and Deepa Seetharaman in Abilene; Editing by Shinjini Ganguli)