OpenAI and SoftBank are scaling back on their ambitious Stargate project, and planning to build a smaller data center by the end of the year, according to the latest reports by the Wall Street Journal.
The artificial intelligence nonprofit and the Japanese investment company had, along with Oracle, originally planned to invest up to $500 billion in AI data centers. However, soon afterwards, the project started facing various setbacks.
While the companies had initially committed $100 billion for immediate deployment, there have been disagreements between OpenAI and SoftBank over various key decisions, including site locations. Despite this, both firms said in a statement that they are “moving with urgency on site assessments” and exploring multiple state-level projects, according to Reuters.
The project would now be focusing on building a small data center by the end of this year, likely in Ohio.
READ: OpenAI and SoftBank’s $100 billion Stargate Project faces setbacks (May 13, 2025)
In a joint statement, the two companies said they were advancing projects in multiple states and were “moving at hyperscale and speed to deliver the AI infrastructure that will power the future and serve humanity.”
According to WSJ, OpenAI CEO Sam Altman has gone ahead and signed a data center deal with Oracle that calls for OpenAI to pay more than $30 billion a year to the software and cloud-computing company starting within three years.
Meanwhile, the scaling back and stalling of Stargate seems to be a serious blow to the ambitions of SoftBank CEO Masayoshi Son, who has been trying to obtain a prominent seat at the AI table for a while.
SoftBank had invested $30 billion in OpenAI earlier this year, and this investment was made alongside the plans for Stargate, giving SoftBank a role in the physical infrastructure needed for AI. Over the last decade, Son had devoted $140 million into finding the AI companies of the future, only to miss out on OpenAI and all of its competitors before the launch of ChatGPT.
However, he was successful with his 2016 acquisition of chip company Arm, which surged in value over the past two years. Towards the end of 2024, Son met Altman in Tokyo for an agreement, bringing their plans to Trump’s aides with the offer of announcing a giant U.S. investment. On the second day of Trump’s new administration, they stood in the White House beside Trump, vowing to spend $500 billion by 2029. “This is the beginning of our golden age,” Son said at the White House.
READ: OpenAI, SoftBank, Oracle to invest $500 billion in AI data centers under Trump (January 22, 2025)
The companies also brought in Oracle and U.A.E. firm MGX as partners in the initial announcement, but their role was unclear. “Stargate is not formed yet,” Oracle Chief Executive Safra Catz said on an investor call last month.
A recent complication between OpenAI and SoftBank has been over how extensively to build data centers on sites tied to SB Energy, a SoftBank-backed energy developer. Altman has also used the Stargate name on projects that aren’t being financed by the partnership between OpenAI and SoftBank. The trademark to Stargate is held by SoftBank, according to public filings.
OpenAI has recently rolled out OpenAI for Countries, an initiative under the Stargate project that helps nations build AI infrastructure. Only time will tell how far the Stargate project will go and what players will remain in the AI game.