OpenAI and Oracle Corp. announced an agreement to develop 4.5 gigawatts of data center capacity in the United States, forming part of the Stargate initiative to build a network of AI data centers for OpenAI.a
The Stargate initiative aims to establish a network of artificial intelligence data centers across the United States. OpenAI and its partners plan to invest up to $100 billion in 10 gigawatts of AI infrastructure. OpenAI indicated in a blog post that it anticipates exceeding its initial commitment due to strong partner momentum. However, reports from The Wall Street Journal suggest a sharp reduction in the scope of the project’s initial phase, despite the long-term goals growing more ambitious.
OpenAI has set a goal of constructing a small data center by the end of the year, likely located in Ohio. Additionally, the company is engaged in the development of two other data center campuses in Texas. The progression of OpenAI’s construction efforts is complicated by ongoing disagreements with SoftBank Group Corp. SoftBank became OpenAI’s largest backer this year after committing to lead a funding round potentially valued at $40 billion, and SoftBank owns the Stargate trademark.
The UK is now a key strategic partner for OpenAI
Key terms of the partnership between OpenAI and SoftBank have not been finalized, including the specific role of SB Energy, a SoftBank subsidiary, in the construction initiative. An agreement has not yet been reached regarding the number of Stargate data centers to be built on sites affiliated with SB Energy. OpenAI stated in a recent blog post that collaboration with SoftBank involves focusing on site assessments and reimagining data center designs to support advanced AI operations.
OpenAI has reportedly secured a quarter of the $40 billion funding round led by SoftBank. An initiative to raise the remaining $30 billion is anticipated to commence on July 28, with SoftBank contributing up to three-quarters of this sum. Oracle expects to generate over $30 billion annually from its AI infrastructure agreement with OpenAI, anticipating this revenue milestone will be reached within three years.
Beyond the 4.5 gigawatts of capacity announced, Oracle is also constructing one of OpenAI’s Texas data center campuses. This facility is projected to house up to 400,000 Nvidia Corp. GB200 Grace Blackwell accelerators. Each GB200 chip incorporates two Blackwell B200 graphics cards and a 72-core Grace central processing unit. Oracle has begun the process of moving GB200-equipped server racks into this data center. OpenAI researchers are presently utilizing this hardware for AI training and inference workloads. This Texas data center is expected to achieve full operational status by mid-2026.
