Does the artificial intelligence (AI) develop Stargate to a billion dollar flop? Project does not get going
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Published on: July 28, 2025 / update from: July 28, 2025 – Author: Konrad Wolfenstein
Does the artificial intelligence (AI) develop Stargate to a billion dollar flop? Project does not get on the move – Image Xpert.digital
America's AI Superprojekt Stargate threatens to fail – Zoff the tech giants: How a dispute between Openaai and Softbank America's AI future endangered
Stargate project on the edge of the abyss? Openaai now surprisingly goes its own way – more than just a setback: that is why the failure of Stargate is a danger to the United States
The Stargate project is a joint venture in January 2025 by US President Donald Trump for investments in the American AI infrastructure. The Allianz was founded by Openai, Softbank, Oracle and the MGX investment fund from the United Arab Emirates. The project is scheduled to invest $ 100 billion and extend this sum to up to $ 500 billion over the next four years.
The name “Stargate” is already going back to 2024 when Openaai and Microsoft began to develop a $ 100 billion AI Supercomputer. The term is named after the 1994 film of the same name, in which star gates served as portals to other worlds. Due to its enormous size, the program is compared to the Manhattan Project.
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Who are the main actors of the project?
The Stargate Project is worn by four main partners. Softbank and Openai act as a leading partner, with Softbank supporting financial responsibility and Openaai. Softbank boss Masayoshi Son is chairman of the company. Oracle and MGX complete the consortium as
In addition to the founders, important technology partners are also poor, Microsoft and Nvidia. Despite his close partnership with Openaai, Microsoft remains a technology partner and continues to provide Azure cloud services. However, the company does not participate in the financing of Stargate, but pursues its own infrastructure initiatives.
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What are the goals of the project?
The declared goal of the Stargate project is to secure the US leadership role in the field of artificial intelligence and to create hundreds of millions of American jobs. The project should not only support the reintustrialization of the United States, but also offer a strategic ability to protect America and its allies.
Specifically, 20 state -of -the -art data centers are to be created that can achieve a total output of 10 gigawatts. This infrastructure would correspond to the electricity consumption of around 10 million households. At the original presentation in the White House there was talk of over 100,000 new jobs.
Why is the project not making ahead?
Despite the media -effective announcement in January 2025, there are no significant progress six months later. The Wall Street Journal reports that not yet a single contract for a data center has been concluded as part of the Stargate project. Instead of the originally promised $ 100 billion “immediate investment”, only a much more modest goal is now set: a small data center in Ohio until the end of the year.
The main cause of these delays lies in fundamental disagreements between Openai CEO Sam Altman and Softbank boss Masayoshi Son about the future orientation of the project. The choice of location for data centers and the role of SB Energy, a softbank supported by Softbank, are particularly controversial.
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What specific issues are there?
A central conflict point concerns the location strategy. While a data center is planned in Ohio, a more cost-effective design is to be used for this, which would significantly reduce the immediate instantials of $ 100 billion. Additional confusion creates projects in Abilene and Denton in the US state of Texas, which, according to Altman, are also part of Stargate, in which Softbank is not involved.
In addition, there is no agreement in both companies to the extent to which data centers should be built at locations that are related to SB Energy. This disagreement about the basic strategy and infrastructure prevents concrete progress in the project.
What role does the complex financing structure play?
Another possible point of conflict is the complex interweaving between Softbank and Openai. Softbank invested $ 30 billion in Openai in early 2025 – the largest individual investment in a startup until then. In order to raise this sum, Softbank had to accept new debts and sell their own assets.
In return, Softbank aimed a leading role in setting up the physical infrastructure required for AI. In this context, soft banks could also play a role: the takeover of the ARM Server CPU developer Ampere in March 2025 for $ 6.5 billion and the takeover of ARM for 27.95 billion euros in 2016.
How does Openai react to the delays?
Openai seems to compensate for the delays in Stargate through independent activities. The company recently concluded a separate contract with Oracle via data centers with a capacity of 4.5 gigawatts. This deal provides for payments of over $ 30 billion annually, starting in three years.
The estimated annual costs for this Oracle agreement should amount to $ 30 to $ 40 billion. Oracle is also to take over the technical implementation, for which 400,000 Nvidia chips of the GB200 NVIDIA chips are planned. Openai refers to data centers in Abilene and Denton, Texas, as part of Stargate, although Softbank is not involved in these projects.
What are the technical challenges?
The planned infrastructure places huge technical requirements. A data center with 4.5 gigawatts of power corresponds to the electricity consumption of around 4 million households. The total output of 10 gigawatt, which was targeted for the original Stargate project, would even cover the electricity requirement of around 10 million households.
These enormous energy requirements bring considerable challenges in the power supply. Data centers for AI applications not only require huge amounts of electricity, but also reliable and continuous care. A single AI data center can already consume as much electricity today as 100,000 households.
What about the Nvidia chips?
The planned 400,000 NVIDIA chips of the type GB200 are another technical and logistical challenge. These chips are based on Nvidia's latest Blackwell architecture and are specially optimized for AI applications. A single GB200 chip can perform up to 40 Petaflops AI performance.
The GB200 NVL72 system, which is to be used in the planned data centers, connects 72 Blackwell GPUs and 36 grace CPUs in a fluid-cooled rack design. This configuration can achieve up to 1,440 Petaflops AI performance with FP4 accuracy.
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Stargate delays: How the US ACI strategy has formed
What effects do the delays have?
The delays in Stargate have far-reaching effects on the American AI strategy. The original goal of creating over 100,000 new jobs is still a long way off. The delays also endanger the desired strengthening of the US leadership role in the AI area.
For the companies involved, the stalling negotiations mean considerable opportunities. Softbank has already made massive investments in Openai and also carried out strategic takeover such as those of Ampere. For its part, Oracle has already reserved capacities for the planned data centers and made technical preparations.
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What do the public statements look like?
Despite the internal tensions, both CEOs emphasize that there are no differences in their joint efforts. Altman spoke of a “wonderful partnership” with Son. In a joint explanation, both companies stated that they promote projects in several states and “move on a large scale and at high speed to provide the AI infrastructure that will drive the future and serve humanity”.
According to internal statements to employees, Son was optimistic and expressed the willingness to invest even more in the company. However, these public statements contradict the reported internal difficulties and the lack of concrete advances.
What alternative is openai?
In parallel to the stagnant Stargate negotiations, Openai has developed independent partnerships. In addition to the oracle deal mentioned, there is also an agreement with the cloud provider CoreWeave. Together, the computing power in this way corresponds almost to the quantity that Stargate originally announced for 2025.
The construction of a first data center in Abilene, Texas, is already underway. The system has been developing the start-up crusoe since June 2023 for Oracle, which wants to acquire chips for seven billion US dollars and want to pass on the capacity to Microsoft to support Openai. Parts of the Abilene system have already been active and Oracle has started to install server racks based on NVIDIAS GB200 platform.
How does Microsoft influence the situation?
Microsoft, which has already invested $ 13 billion in Openaai, does not participate in the financing of Stargate, but supports the project technologically. Instead, the group relies on its own infrastructure initiatives, including a $ 30 billion fund with black rock and planned investments of $ 80 billion this year.
The relationship between Microsoft and Openaai becomes more complicated by the Stargate developments. Openai strives for a greater independence from Microsoft and is looking for alternative cloud providers. At the same time, both companies negotiate their partnership, especially with regard to a possible IPO of Openai.
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What role does MGX play from the emirates?
MGX, the fourth partner in the Stargate consortium, is an emiratic state investment fund that was founded by the Abu Dhabis government in 2024. The fund specializes in AI technologies and manages assets worth $ 100 billion. MGX is mainly worn by the state asset fund Mubadala from Abu Dhabi.
MGX is chairman of Sheikh Tahnoun bin Zayed Al Nahyan, the brother of the President of the VAE. The fund has already invested in various AI projects worldwide and has announced a partnership with Blackrock and Microsoft. MGX plans to play a leading role in the global AI ecosystem and to play both local and international investments.
What does this mean for the future of the AI infrastructure?
The difficulties in Stargate reflect the enormous challenges associated with the establishment of an AI infrastructure in the gigawatt area. The electricity requirement for AI applications increases exponentially, and individual data centers can already reach the energy requirements of millions of households.
The international energy agency forecast an additional capacity requirement of 60 gigawatts for data centers and AI applications for the United States by 2029. This roughly corresponds to the performance of 60 nuclear power plants. These huge energy requirements represent not only technical, but also economic and political challenges.
How do the stock markets react?
Despite the problems with Stargate, the stock markets reacted positively to the original announcement. Oracle recorded price gains of 6 percent after the Stargate announcement, Softbank rose by 7.5 percent and Nvidia 5 percent. These reactions show the great trust of investors in the long-term prospects of the AI infrastructure, even if there are short-term implementation problems.
The market reaction also underlines the strategic importance of the companies involved for AI development. Oracle as a provider of cloud infrastructure, NVIDIA as a manufacturer of specialized AI chips and soft bank as one of the largest technology investors in the world are all central actors in the AI ecosystem.
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An ambitious project with great challenges
The Stargate project embodies both the enormous ambitions and the practical challenges when building a next generation AI infrastructure. The originally planned $ 500 billion investments over four years would be one of the largest technology projects in history. However, the reality shows that there are considerable hurdles between vision and implementation.
The disagreements between the main partners Openai and Softbank illustrate how complex the coordination between different companies with different strategic goals is. While Openaai is progressing pragmatically and is taking independent partnerships, Softbank seems to pursue a more comprehensive strategy that also includes its other investments such as poor and amps.
The technical requirements of the project are unprecedented: data centers with a total output of 10 gigawatts would require the electricity consumption of millions of households and present the energy infrastructure with new challenges. At the same time, the already ongoing projects in Texas show that such systems are technically feasible, even if they require tremendous investments and careful planning.
Regardless of the current problems in Stargate, the development of the AI infrastructure will continue. Openais Independent contracts with Oracle and other providers show that the demand for massive computing power is real and alternative ways are found if original plans do not work. The question is not whether, but how and by whom this infrastructure is built – and whether the original vision of a coordinated national AI initiative can still be realized.
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