The ambitious “Stargate” artificial intelligence infrastructure initiative—backed by OpenAI, Oracle, and SoftBank—has encountered significant delays as negotiations between the partners slowed early progress, according to a report by The Information.
The project, announced in January 2025 by Donald Trump, aims to invest up to $500 billion in large-scale data centers across the United States to support the rapid expansion of AI computing capacity.
Negotiations Stall Early Development
Instead of accelerating construction, the initiative became entangled in complex negotiations over ownership, control, and financing.
One key point of friction involved a planned 1-gigawatt data center in Texas. OpenAI had initially intended to develop the facility independently, but later brought SoftBank into the project during renewed partnership discussions.
Sources say the two companies disagreed over control before reaching a compromise during extended negotiations in Tokyo. Under the final structure:
- SoftBank will own and develop the site
- OpenAI will design the facility and hold a long-term lease
SoftBank’s broader infrastructure strategy also faced setbacks. The company was forced to pause its proposed $50 billion acquisition of data center operator Switch due to regulatory concerns.
Financial Constraints Shape Strategy
The delays highlight a broader challenge for OpenAI: the high cost of building AI infrastructure.
The company’s preferred long-term strategy is to own and operate its own data centers to reduce dependence on third-party cloud providers. However, the scale of investment required has raised concerns among investors, particularly as OpenAI has not yet reached profitability.
Analysts have warned that the company could face cash pressure as early as mid-2027. As a result, OpenAI returned to negotiations with its Stargate partners, slowing its original plan to secure 10 gigawatts of compute capacity within three years.
Despite the financial risks, investor confidence remains strong. OpenAI is reportedly seeking $100 billion in new funding that could push its valuation to around $800 billion.
Oracle Moves Ahead with Major Commitment
Among the partners, Oracle moved first to formalize infrastructure plans. By the second half of 2025, the company agreed to build a large Stargate facility capable of supporting up to 2 million AI chips.
OpenAI later committed to purchasing $300 billion worth of computing capacity from Oracle over five years, though questions remain about how both companies will finance commitments of that scale.
Oracle raised additional capital through bond offerings in late 2025, but the move drew criticism from some investors who alleged the company made overly optimistic disclosures during the initial issuance.
Project Back on Track, but Risks Remain
After months of negotiations and restructuring, Stargate development is now reportedly moving forward across multiple sites. However, the early delays underscore the financial and operational complexity of building the massive infrastructure required to support next-generation AI systems.
For OpenAI, the success of the project will be critical—not only to meet growing demand for computing power but also to reduce long-term reliance on external cloud providers in an increasingly competitive AI landscape.
