Stargate AI Project Faces Setbacks: OpenAI and SoftBank Scale Back Ambitious Plans

SoftBank and OpenAI's Stargate aims building small data center by year-end, WSJ reports

July 21 (Reuters) - Stargate, a multi-billion-dollar effort by ChatGPT's creator OpenAI, SoftBank (9434.T), opens new tab and Oracle (ORCL.N), opens new tab to supercharge the U.S.' AI ambitions is now setting the more modest goal of building a small data center by the end of the year, likely in Ohio, the Wall Street Journal reported on Monday. In January, U.S. President Donald Trump hosted top tech CEOs at the White House to highlight the $500 billion Stargate Project, which would create more than 100,000 jobs in the country. SoftBank and OpenAI, which jointly lead the joint venture, have been at odds over crucial terms of the partnership, including where to build the sites, the report said, citing people familiar with the matter. In a joint statement, the two companies told Reuters they were moving "with urgency on site assessments" and were also advancing projects in multiple states. When the project was unveiled, the companies involved, along with other equity backers of Stargate, had committed $100 billion for immediate deployment, with the remaining investment expected to occur over the next four years. Oracle Chairman Larry Ellison said at the time that the first of the project's data centers was already under construction in Texas. Trump has prioritized winning the AI race against China and declared, on his first day in office, a national energy emergency aimed at removing all regulatory obstacles to oil and gas drilling, coal and critical mineral mining, and building new gas and nuclear power plants to bring more energy capacity online. Reporting by Preetika Parashuraman in Bengaluru; additional reporting by Rishabh Jaiswal; Editing by Alan Barona Our Standards: The Thomson Reuters Trust Principles., opens new tab

SoftBank and OpenAI's Stargate aims building small data centre by year-end: WSJ - The Economic Times

Stargate, a multi-billion-dollar effort by ChatGPT's creator OpenAI, SoftBank and Oracle to supercharge the US' AI ambitions is now setting the more modest goal of building a small data centre by the end of the year, likely in Ohio, the Wall Street Journal reported on Monday. In January, US President Donald Trump hosted top tech CEOs at the White House to highlight the $500 billion Stargate Project, which would create more than 100,000 jobs in the country. SoftBank and OpenAI, which jointly lead the joint venture, have been at odds over crucial terms of the partnership, including where to build the sites, the report said, citing people familiar with the matter. In a joint statement, the two companies told Reuters they were moving "with urgency on site assessments" and were also advancing projects in multiple states. When the project was unveiled, the companies involved, along with other equity backers of Stargate, had committed $100 billion for immediate deployment, with the remaining investment expected to occur over the next four years. Oracle Chairman Larry Ellison said at the time that the first of the project's data centres was already under construction in Texas. Trump has prioritized winning the AI race against China and declared, on his first day in office, a national energy emergency aimed at removing all regulatory obstacles to oil and gas drilling, coal and critical mineral mining, and building new gas and nuclear power plants to bring more energy capacity online.

$500 Billion Stumble: SoftBank-OpenAI's Massive AI Vision Faces Setbacks - Oracle (NYSE:ORCL)

Six months after its high-profile announcement at the White House, the $500 billion Stargate project -- an ambitious joint venture between OpenAI and SoftBank to ramp up America's artificial intelligence infrastructure -- has run into major delays and scaled-back ambitions. The Details: Despite a splashy debut that included vows of investing $100 billion "immediately," Stargate has yet to secure a single major data center deal. Instead, the project is now focused on building a much smaller facility in Ohio by year's end, as partners struggle to agree on crucial terms, according to the Wall Street Journal. Read Next: Opendoor Stock Frenzy Continues -- Is $40 Per Share The Next Stop? At the heart of the slowdown are differences between OpenAI and SoftBank regarding the partnership's structure and implementation, which have prevented the new entity from making significant advances. Although both companies committed billions and shared leadership responsibilities -- SoftBank's Masayoshi Son overseeing finances and OpenAI's Sam Altman managing operations -- persistent disputes over control and strategy have left Stargate's momentum waning. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Why It Matters: OpenAI has forged ahead independently, recently striking a blockbuster $30 billion annual deal with Oracle Corp. ORCL for cloud computing capacity. The agreement with Oracle, along with smaller deals with other data center providers, brings OpenAI close to meeting the annual expansion targets Stargate set out for itself, even as the joint project lags behind. SoftBank, undeterred by setbacks, remains optimistic about OpenAI and is reportedly interested in further investment despite Stargate's rocky start. While leaders from both companies publicly maintain that their partnership is strong, the reality is that slow progress and internal disagreements have dampened early expectations. Read Next: Rare Earth Royalty: Meet The Power Players Shaping The Industry Photo: Shutterstock ORCLOracle Corp$238.75-2.73%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum93.58Growth56.34QualityN/AValue13.51Price TrendShortMediumLongOverview This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

The Half A Trillion Dollar Stargate AI Venture Is Now Falling Victim To The Disagreements Between OpenAI And SoftBank

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Stargate was supposed to cement America's ascendancy in the still-fledgling AI sphere, which is widely considered the defining technology of the 21st century. Yet, this gargantuan venture, worth around half of a trillion dollars, is now falling victim to the disagreements between it's principal backers: OpenAI and SoftBank. As a refresher, President Trump had announced the Stargate venture back in January, entailing at least $500 billion in investments to build out the requisite AI infrastructure in the US over the next four years. Stargate was supposed to rope in a number of tech companies, with OpenAI, SoftBank, Oracle, and MGX initially identified as key nodes of this ambitious venture. However, the project has devolved into a duopoly of sorts, with OpenAI and SoftBank retaining primary influence over Stargate's direction. Now, as per the reporting by the Wall Street Journal, it appears that the project is falling victim to the disagreements between it's principal backers. Back in January, OpenAI and SoftBank had committed to investing $100 billion in Stargate "immediately," inviting skepticism from Elon Musk, who had bluntly declared that "they [Stargate participants] don't actually have the money." Well, six months later, SoftBank and OpenAI have massively scaled back their joint investment goals for the year, having agreed to build only a small data center in Ohio by the end of the year. What's more, the venture has failed to close even a single data center deal under the auspices of the Stargate venture so far. OpenAI is reportedly hesitant to build out Stargate's infrastructure on sites linked to SB Energy, an energy development firm backed by SoftBank. Also, while SoftBank holds the trademark for Stargate, OpenAI has liberally used the venture's high-profile tag in projects that do not involve SoftBank, such as for data centers in Abilene and Denton - both located in Texas. Interestingly, OpenAI is moving full-steam ahead in signing data center deals, even without SoftBank. For instance, the creator of GPT LLMs recently inked a mammoth 4.5GW data center deal with Oracle, which entails payments of $30 billion per year to Oracle starting in around three years. For context, OpenAI's Sam Altman is on record for saying that a 5GW data center capacity requires an investment of around $100 billion. OpenAI has also inked a separate deal with CoreWeave, that adds $4 billion to an existing $11.9 billion for using CoreWeave's gigantic GPU stash. Interestingly, OpenAI has singlehandedly concluded $100 billion worth of data center deals so far this year, which aligns with Stargate's investment target for the year. These investments, however, do not explicitly include SoftBank. Of course, officially OpenAI and SoftBank remain committed to Stargate, with the duo recently asserting that they will together build 10GW of data center capacity in the US over the next few years. So far, however, these commitments lack a definitive follow through.

Stargate Dials Back Near-Term Goal Amid Disagreement Over Data Center Sites | 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. Six months after project was announced, the newly formed company operating the effort has not made a deal to build a data center and has shifted its goal from investing $100 billion immediately to building one data center by the end of 2025, the Wall Street Journal (WSJ) reported Monday (July 21). The slow start was caused in part by disagreements between Stargate's two joint leaders -- SoftBank and OpenAI -- over where to build data centers, according to the report. Asked about the report by the WSJ, the companies said in a joint statement that they were making progress in several states and moving quickly to deliver AI infrastructure. In the meantime, OpenAI has struck two data center deals -- one with Oracle and one with CoreWeave -- that do not include SoftBank and that together will give OpenAI access to as much computing power as Stargate said in January that it would deliver, according to the report. When Stargate was announced in January, it was described as an up-to-$500 billion project that aimed to build big AI-focused data centers in the U.S. The first 10 were to be constructed in Texas, with the total later to be expanded to 20. It was reported in May that Oracle, one of the equity partners in Stargate, would buy $40 billion worth of Nvidia's chips to power the first Stargate project, a new data center in Abilene, Texas, and that the facility was expected to be fully operational by the middle of 2026. AI data centers are needed because traditional data centers and power grids are struggling to accommodate the computational power, data storage and energy required by AI, PYMNTS reported in January. In another, separate effort, Meta CEO Mark Zuckerberg said July 14 that his company will invest "hundreds of billions of dollars" into AI infrastructure for its superintelligence effort. On July 9, when Nvidia became the world's first $4 trillion public company, it was reported that the chip designer and manufacturer was enjoying a continuing boom in demand for AI technologies.

SoftBank and OpenAI's Stargate aims building small data center by year-end, WSJ reports

(Reuters) -Stargate, a multi-billion-dollar effort by ChatGPT's creator OpenAI, SoftBank and Oracle to supercharge the U.S.' AI ambitions is now setting the more modest goal of building a small data center by the end of the year, likely in Ohio, the Wall Street Journal reported on Monday. In January, U.S. President Donald Trump hosted top tech CEOs at the White House to highlight the $500 billion Stargate Project, which would create more than 100,000 jobs in the country. SoftBank and OpenAI, which jointly lead the joint venture, have been at odds over crucial terms of the partnership, including where to build the sites, the report said, citing people familiar with the matter. In a joint statement, the two companies told Reuters they were moving "with urgency on site assessments" and were also advancing projects in multiple states. When the project was unveiled, the companies involved, along with other equity backers of Stargate, had committed $100 billion for immediate deployment, with the remaining investment expected to occur over the next four years. Oracle Chairman Larry Ellison said at the time that the first of the project's data centers was already under construction in Texas. Trump has prioritized winning the AI race against China and declared, on his first day in office, a national energy emergency aimed at removing all regulatory obstacles to oil and gas drilling, coal and critical mineral mining, and building new gas and nuclear power plants to bring more energy capacity online. (Reporting by Preetika Parashuraman in Bengaluru; additional reporting by Rishabh Jaiswal; Editing by Alan Barona)