Motivated to ensure that the United States remains a global leader in the field of artificial intelligence (AI), OpenAI and SoftBank have created a new company, the Stargate Project, which will develop infrastructure to support AI growth.
Overview
Overview of the project
Announced in January 2025, Stargate seeks to invest $500 billion through 2029 in the development of data centers and other infrastructure in the United States that will support OpenAI. In addition to OpenAI and SoftBank, software and cloud computing specialist Oracle (NASDAQ:ORCL) and MGX, a technology fund located in the United Arab Emirates, will provide the initial round of equity funding.
In response to other nations' inquiries about developing similar programs, OpenAI announced OpenAI for Countries in May 2025. From helping governments build data center capacity to providing a customized ChatGPT to citizens, OpenAI for Countries will collaborate with the U.S. government to support AI growth abroad. For the first phase of this initiative, OpenAI aims to help 10 countries or regions with their projects.
Why it's important
The importance of Stargate
Just as people who flip kitchen lights on don't often think of the power plants where the electricity is produced, people using ChatGPT aren't likely to consider what happens between making their requests of the AI tool and then receiving their responses. In short, there's a significant amount of computing taking place -- computing that requires copious amounts of electricity.
Of course, it's not only OpenAI that's cognizant of the high power demands that AI is placing on the electrical grid. Leading AI providers like Meta Platforms (META -0.26%), Microsoft (MSFT 0.54%), Amazon (AMZN -0.33%), and Alphabet (GOOG 0.45%) are investing billions of dollars in developing data centers to meet the computing demands of AI.
Further insights
Further insights into Stargate
In addition to SoftBank and Oracle, there are some other well-known AI names that are helping to develop Stargate with OpenAI: Arm Holdings (ARM 2.01%) and Nvidia (NVDA -0.12%). Providing essential technology for the first data center from the project that will be located in Texas, Arm will supply central processing units (CPUs) along with Nvidia, which will also contribute its Spectrum-X, a networking platform uniquely suited for the intense computing workloads that AI demands.
Microsoft is yet another partner helping OpenAI with Stargate. The collaboration is hardly a surprise since the two companies first began working together in 2019, and they have a contract that extends to 2030. While OpenAI operates on Microsoft's Azure platform, Microsoft is also a major investor in OpenAI.
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Stargate in action
Stargate in action
Planning on deploying $500 billion to develop data centers, OpenAI certainly has lofty ambitions with Stargate. Smart -- and experienced -- investors know full well, however, that a company's articulation of lofty goals doesn't guarantee that they will come to fruition. While OpenAI announced Stargate in early 2025, it ran into a snag just a few months later when SoftBank, which planned on investing $100 billion in the project, encountered some difficulties courting investors due to questions about tariffs and other concerns.
Time will tell if OpenAI succeeds in growing its data center infrastructure, but one thing that seems fairly certain is that data center growth among the AI industry writ large is poised to grow considerably -- a boon for companies like Nvidia that provide the hardware necessary for the development of data centers.
