How OpenAI scrambled for compute as Stargate stalled amid clashes with SoftBank; sources say OpenAI building its own data centers is not its near-term priority
When President Donald Trump announced the $500 billion Stargate AI data center project in January 2025, the three companies charged …
The InformationAnissa Gardizy
Context & Ripple Effects
Stargate began as a joint OpenAI, SoftBank and Oracle infrastructure commitment, with an initial $100 billion commitment and a stated path to $500 billion. The project’s original joint-venture launch made its delivery central to OpenAI’s planned compute expansion.
This report follows evidence that Stargate had struggled to launch and reduced its near-term plans. The significance is less the announced scale than the execution gap: disagreements between its principal backers are constraining OpenAI’s access to capacity when it needs it.
First-order effects
OpenAI must secure compute through alternatives while Stargate is stalled, rather than rely on the venture to supply near-term capacity.
SoftBank and OpenAI face an immediate execution problem: their infrastructure partnership has not translated into the planned buildout, and OpenAI is not treating self-built data centers as its near-term remedy.
Second-order effects
Cloud and other external compute suppliers become more consequential to OpenAI’s capacity planning, potentially gaining negotiating leverage while the venture remains unresolved.
A delayed joint buildout raises the value of more modular capacity arrangements, because OpenAI can pursue compute without waiting for SoftBank and Stargate to align on project terms.
Third-order effects
The episode underscores that AI infrastructure plans are constrained as much by financing, governance and partner alignment as by headline investment commitments.
If this pattern persists, leading AI labs may favor diversified, bilateral compute arrangements over dependence on a single marquee infrastructure joint venture.
The trend: AI labs are treating compute procurement as a portfolio and execution challenge, not simply a race to announce ever-larger data-center commitments.
@anissagardizy8 It feels like $ORCL is trying to sabotage themselves. Negative free cashflow, piling billions into their OpenAI investment & now this. Those credit default swaps lookin real nice right about now.
@anissagardizy8 Disturbing trend of “journalists” creating news. Altman vs Jensen is a good example. She has a lot wrong: 1) Son has no beef with Sam: in fact he just pumped in another $22B into Stargate in Dec 2) Abilene & Wisconsin are active. She is looking at paper vs dirt
$IREN “The reality is, there is a lot of fake power in the market. There is a lot of what we call ‘paper power.’ People are out there claiming to have gigawatts of capacity, but when you look closely, they don't have the substations, they don't have the physical infrastructure,
The $500 billion number was always the distraction. The constraint was always execution. Stargate LLC was announced at the White House 13 months ago. Three partners. $100 billion “immediately.” 10 gigawatts of compute. The joint venture entity itself hasn't staffed up. Hasn't
Per @theinformation's @anissagardizy8, Stargate is effectively dead unless you consider any data center project OpenAI is a tenant of a Stargate data center. Been obvious since the very beginning this was never a real initiative https://www.theinformation.com/ ... [image]
The JV drama, governance spats, byzantine credit structures, and recursive financing will continue making headlines. And folks can feel free to analyze all of it for signal. But why not just look at what's actually happening on the ground? Our drone imagery from Stargate [video]
NEW: The Stargate joint venture between OpenAI, Oracle and SoftBank hasn't staffed up and isn't building OpenAI's data centers. Inside the unraveling: clashes over control, marathon negotiations fueled by 7-Eleven in Tokyo, financing pushback, and a quiet pullback from OpenAI
Data center construction is very likely peaking this month nationally, the road gets rockier from here. We'll have our full update next week as we process all of the data & updates from municipalities.
👀More than a year after the White House announcement, the Stargate JV still hasn't staffed up or developed any OpenAI data centers. The three partners disagreed over roles from the start. OpenAI tried to self-build but lenders balked at backing a company burning billions with
I'm insanely bullish and think this story way overstates the issues but it is also mildly concerning that the relevant parties weren't sufficiently hopped up on Adderall and had to duck out to 7-11 for sustenance. The labs need more pod-bros. [image]
“.. Exclusive: Stargate launched to much fanfare but never got off the ground, forcing OpenAI to pivot to satisfy its computing needs.” — @theinformation.com — www.theinformation.com/articles/ ins... [image]
Incredible reporting from @anissagardizy8 in @theinformation about OpenAI's struggle to get more computing power as Stargate—its $500B data center buildout—has floundered. https://www.theinformation.com/ ... It includes this detail. We are in the dirt-eating phase of the AI hype …