TMTPOST -- OpenAI and its Japanese partner SoftBank Group Corp. are scaling back their near-term plans of Stargate, a project with a total of $500 billion planned investment to supercharge the U.S. artficial intelligence (AI) amibitions.
Credit：Pixabay
OpenAI and SoftBank, which jointly lead the Stargate, have been at odds over crucial terms of the partnership, including where to build the sites, and the disagreements led to their sharply scaling back plans in the short run, the Wall Street Journal reported on Monday, citing people familiar with the matter.
It was said the Stargate now is setting a more modest goal of building a small data center by the end of this year, maybe in Ohio, and is hoping to adopt a new design that would cost less for its first project in Ohio.
The report noted that OpenAI CEO Sam Altman, despite the Stargate’s lethargic launch, has plowed ahead without SoftBank, signing deals for data centers with other operators, such as Oracle Corporation, another Stargate backer.
Oracle on July 1 disclosed in a regulatory filing that it has signed up a cloud deal that is expected to generate $30 billion annually, starting in fiscal year 2028. A day after the disclosure, OpenAI was reported to lease around 4.5 gigawatts (GW) of U.S. data center power under the Stargate through an agreement tapping Oracle’s computing power.
As part of Oracle’s reported Stargate contract requirements, the company is expected to establish multiple data centers across the U.S. The capacity of approximately 4.5GW represents about a quarter of the current operational data centre capacity in the Texas. Potential sites for the new data centres include states such as Texas, Michigan, New Mexico, Wisconsin, Wyoming, Georgia, Ohio, and Pennsylvania. Oracle will also reportedly enhance a 1.2GW Stargate facility in Abilene, Texas.
OpenAI and SoftBank were moving "with urgency on site assessments" and were also advancing projects in multiple state, the two companies said in a joint statement later Monday, according to Reuters.
U.S. President Donald Trump announced on January 28 Stargate, co-founded by OpenAI, SoftBank and Oracle, plans to input a total of up to $500 million with initial investment of $100 billion in AI projects, and is expected to create “over 100,000 American jobs almost immediately.”
“We’re starting off with tremendous investment coming into our country at levels that nobody’s really ever seen before,” Trump said in in a White House briefing. He added Stargate will build “the physical and virtual infrastructure to power the next generation of AI,” including data centers.
Altman, SoftBank CEO Masayoshi Son and Oracle Chairman Larry Ellison joined Trump for the announcement. Altman touted Stargate will be “the most important project of this era.”
At that time Son said Stargate will immediately input $100 million with the total investment target of “at least” $500 million, including data centers and physical campuses, and Ellison said the first of the project's data centers was already under construction in Texas.
Stargate intends to invest $500 billion over the next four years building new AI infrastructure for OpenAI in the United States, backed by SoftBank, OpenAI, Oracle and Abu Dhabi-based tech investment firm MGX as initial equity funders, OpenAI said in a statement on January 28.
SoftBank and OpenAI are the lead partners for Stargate, with the former having financial responsibility and the later having operational responsibility, and Son will be the venture’s chairman, according to the statement. It said Arm Holdings Plc., Microsoft Corporation, Nvidia Corporation, Oracle, and OpenAI are the key initial technology partners.