Stargate Dials Back Near-Term Goal Amid Disagreement Over Data Center Sites

The Stargate artificial intelligence (AI) infrastructure project reportedly got off to a slow start.

Six months after project was announced, the newly formed company operating the effort has not made a deal to build a data center and has shifted its goal from investing $100 billion immediately to building one data center by the end of 2025, the Wall Street Journal (WSJ) reported Monday (July 21).

The slow start was caused in part by disagreements between Stargate’s two joint leaders — SoftBank and OpenAI — over where to build data centers, according to the report.

Asked about the report by the WSJ, the companies said in a joint statement that they were making progress in several states and moving quickly to deliver AI infrastructure.

In the meantime, OpenAI has struck two data center deals — one with Oracle and one with CoreWeave — that do not include SoftBank and that together will give OpenAI access to as much computing power as Stargate said in January that it would deliver, according to the report.

When Stargate was announced in January, it was described as an up-to-$500 billion project that aimed to build big AI-focused data centers in the U.S. The first 10 were to be constructed in Texas, with the total later to be expanded to 20.

It was reported in May that Oracle, one of the equity partners in Stargate, would buy $40 billion worth of Nvidia’s chips to power the first Stargate project, a new data center in Abilene, Texas, and that the facility was expected to be fully operational by the middle of 2026.

AI data centers are needed because traditional data centers and power grids are struggling to accommodate the computational power, data storage and energy required by AI, PYMNTS reported in January.

In another, separate effort, Meta CEO Mark Zuckerberg said July 14 that his company will invest “hundreds of billions of dollars” into AI infrastructure for its superintelligence effort.

On July 9, when Nvidia became the world’s first $4 trillion public company, it was reported that the chip designer and manufacturer was enjoying a continuing boom in demand for AI technologies.