OpenAI plans to work with Japanese company SoftBank and Oracle, among others, to create several AI data centers in the U.S.
The Stargate Project, a joint effort, will start with a big data center in Texas and will later grow to include other states. The companies plan to invest $100 billion in Stargate at first and up to $500 billion in the next four years.
They claim it will create hundreds of thousands of jobs and maintain America’s advantage in AI.
“The Stargate Project is a new company that plans to create new AI systems for OpenAI in the United States,” said OpenAI, Oracle, and SoftBank in a shared statement. “This project will help bring back industry to the United States and improve the country’s ability to protect itself and its allies.”
The companies announced their plans at a press meeting at the White House on Tuesday, where President Donald Trump talked about investing in U.S. infrastructure. SoftBank’s leader Masayoshi Son, OpenAI’s CEO Sam Altman, and Oracle’s co-founder Larry Ellison were present.
Microsoft is a tech partner for Stargate. So are Arm and Nvidia. The Middle East AI fund MGX will partner with SoftBank for its investment. MGX’s first public investment was in OpenAI.
SoftBank, OpenAI, and Oracle are also mentioned as âinitial equity investorsâ in Stargate.
“SoftBank and OpenAI are the main partners for Stargate. SoftBank will handle the finances, while OpenAI will manage operations,” the statement said. Masayoshi Son will be the head of Stargate. Stargate, Oracle, Nvidia, and OpenAI will work together to create and manage this computer system.
The data centers might store chips made by OpenAI in the future. The company is quickly hiring a team of chip designers and engineers. They are also collaborating with semiconductor companies Broadcom and TSMC to develop an AI chip for running models, which may be ready by 2026.
SoftBank is already an investor in OpenAI, having apparently committed $500 million toward the AI startupâs last funding round and an additional $1.5 billion to allow OpenAI staff to sell shares in a tender offer. Oracle has a deal with OpenAI to provide AI computing power.
SoftBank also earlier promised to invest $100 billion in the U.S. over the next four years. Son and Trump have worked closely since 2016. During Trump’s first term, Son said that SoftBank would spend $50 billion in U.S. startups and create 50,000 jobs.
The Information claimed that OpenAI was in talks with Oracle to rent a whole data center in Abilene, Texas, which could have almost a gigawatt of electricity by mid-2026. A gigawatt can power about 750,000 small homes. Crusoe Energy, a data center company, was reportedly part of a project that is expected to cost about $3.4 billion.
The Abilene location will be the first site for Stargate. OpenAI has stated that Stargate is looking at different locations in the country for more schools as they confirm their agreements. By 2029, Stargate might expand to 20 data center locations.
âEach building is a half a million square feet,â Ellison said during the meeting. “There are 10 buildings under construction.”
It’s not clear how Stargate is related to the reported partnership between Microsoft and OpenAI to create a supercomputer worth $100 billion. Parhlo World has contacted OpenAI for more details.
Last year, The Information said that Microsoft and OpenAI plan to create a set of AI data centers in five phases over the next few years. The final phase, called Stargate, will be a large facility that uses 5 gigawatts of power and covers several hundred acres. The Information reported that Stargate was supposed to take about five to six years to finish. Before finishing it, Microsoft was said to be planning to open a smaller data center for OpenAI around 2026.
Tech leaders are urging the U.S. to invest more in data centers because the AI business is rapidly expanding. AI systems need large computer setups to operate and grow effectively.
Goldman Sachs predicts that by 2028, AI will account for around 19% of the power used by data centers. OpenAI has said that not having enough computing power has caused delays in its products. This lack of computing capacity has reportedly created tension between OpenAI and Microsoft, which is both a close partner and a major investor in the business.
Microsoft plans to spend $80 billion on AI data centers. They mentioned in a blog post that their success relies on forming new relationships and investing in large-scale infrastructure. In an interview with Bloomberg, Altman expressed that he thinks it’s important to remove obstacles that are stopping the growth of data centers in the U.S.
Altman said in the interview, “I really agree with President Trump that it’s crazy how hard it is to build things in the U.S.” âPower plants, data centers, any of that kind of stuff. I see how unnecessary red tape can accumulate, but it doesn’t really benefit the country as a whole.
Big data center projects have important critics who argue that they usually create fewer jobs than they claim and can harm the environment. Data centers use a lot of water, which can be a problem in areas that donât have enough water. They also need a lot of electricity, leading some power companies to rely more on fossil fuels.
Those worries don’t seem to be stopping people from investing. According to a McKinsey study, spending on buying and setting up mechanical and electrical systems for data centers could exceed $250 billion in the next five years.
In January, Trump announced that Hussain Sajwani, an Emirati billionaire businessman who created the property development giant DAMAC Properties, will invest $20 billion in new data centers across the U.S. People in the industry are doubtful about how solid the deal is.
Also Read: It Costs Too Much for Openai to Offer the Chatgpt Pro Plan, According to Ceo Sam Altman
Last September, Microsoft and the investor BlackRock teamed up to create a group called the Global Artificial Intelligence Infrastructure Investment Partnership (GAIIP). Their goal is to raise up to $100 billion to build data centers for artificial intelligence and the necessary infrastructure to support them. Other partners in GAIIP include MGX and the infrastructure investor Global Infrastructure Partners.
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