Six months after Japanese billionaire SoftBank, CEO, Masayoshi Son stood beside OpenAI, CEO, Sam Altman and President Trump to announce the mega-project, the venture hasn’t signed a single data centre deal. The plan was to unleash $100 billion “immediately” to build AI infrastructure, but insiders say it has now been scaled back to a modest test site in Ohio, if it happens at all.
SoftBank and OpenAI, the two supposed joint leaders of Stargate, are already at odds over basic details such as where to build sites. While the press release at the White House painted a picture of “hyperscale” ambition, the reality is messy.
Son wants Stargate tied to SB Energy, his energy-development venture, while Altman is signing his massive data centre deals elsewhere, bypassing SoftBank.
OpenAI has just struck a monster $30 billion-a-year data centre deal with Oracle, co-founder, Larry Ellison’s company, that will chew up 4.5 gigawatts of power. Add in a smaller deal with CoreWeave and OpenAI has secured nearly as much data centre capacity as Stargate promised back in January, all without SoftBank’s help.
Oracle, CEO, Safra Catz told investors last month Stargate was still “not formed yet.”
At January’s White House announcement, Son and Altman promised a $500 billion investment by 2029, declaring it the dawn of a “golden age” for AI. SoftBank and OpenAI each pledged $18 billion upfront, with Son as chairman and SoftBank handling the money while OpenAI oversaw operations. Oracle and UAE firm MGX were named as “partners,” though no one actually agreed on how much they’d chip in.
According to the Wall Street Journal, Altman has been using the Stargate name for other projects that have nothing to do with SoftBank. A huge data centre in Abilene, Texas, and another site in Denton, Texas, are branded as Stargate even though SoftBank isn’t involved. Public filings show SoftBank owns the trademark, adding another layer of awkwardness.
Building AI data centres is no trivial job. It requires vast tracts of land, ludicrous amounts of electricity, rare AI chips, and financial engineering on a scale usually reserved for sovereign governments. Stargate is supposedly eyeing a cheaper “new design” for its first build in Ohio, but no shovels are in the ground yet.
For Son, Stargate is supposed to be his grand re-entry into the AI race after years of misfires like WeWork and Katerra. He’s already ploughed $30 billion into OpenAI, taking on new debt and flogging assets to fund it. Despite the delays, Son remains bullish and is reportedly keen to pump in even more cash.
But OpenAI is moving at a breakneck pace. The company is already losing billions a year, but Altman is betting future paying customers and advertising will bankroll his massive compute appetite. The Oracle deal alone dwarfs OpenAI’s current revenue projections, yet Altman insists this is the cost of keeping ahead in the AI arms race.
The Stargate fiasco underlines a brutal truth. Even with billions on the table and political backing from the White House, building the infrastructure for next-generation AI is harder than making grand promises on camera.
