OpenAI and Oracle expand Stargate AI project to 5+ gigawatts

OpenAI and Oracle announced they will develop an additional 4.5 gigawatts of data center capacity, expanding their Stargate initiative that aims to maintain U.S. leadership in artificial intelligence infrastructure. The expansion brings the total Stargate project to over 5 gigawatts of capacity, running on more than 2 million chips, though OpenAI has not disclosed specific locations or funding details for the new facilities.

What you should know: The Stargate initiative represents one of the largest AI infrastructure investments in U.S. history, originally announced as an up to $500 billion, 10-gigawatt project.

• The partnership includes SoftBank Group, a Japanese technology investor, and is establishing its first AI data center in Abilene, Texas.
• President Donald Trump unveiled Stargate at the White House in January, making AI infrastructure a top national priority amid competition with China.
• The new expansion will exceed the partnership’s initial capacity commitments, supporting the massive computing power requirements for generative AI services like ChatGPT and Copilot.

Why this matters: The growing use of AI in sensitive sectors such as defense, combined with China’s push to catch up in AI capabilities, has elevated AI infrastructure to a matter of national security.

• Technology companies like OpenAI and its backer Microsoft are pouring billions into data centers to power increasingly sophisticated AI models that demand enormous computational resources.
• The scale of investment reflects the critical importance of maintaining technological superiority in artificial intelligence development.

Funding challenges: Analysts have raised doubts about the venture’s ability to secure the massive funding required for the project.

• Reports indicated OpenAI and SoftBank would each commit $19 billion to fund Stargate, including $100 billion for immediate deployment.
• In January, Elon Musk, owner of xAI, dismissed the group, saying “they don’t actually have the money.”
• The Wall Street Journal reported Monday that the two companies have been at odds with each other, with Stargate now setting a more modest goal of building a small data center by end-2025, likely in Ohio.

The competitive landscape: The announcement comes as major tech companies race to build the infrastructure necessary to support next-generation AI applications.

• Oracle’s partnership with OpenAI positions both companies to capitalize on the explosive demand for AI computing resources.
• The initiative represents a strategic response to global competition in AI development, particularly from China’s advancing capabilities in the sector.