A massive new AI infrastructure project dubbed “Stargate” just got announced in dramatic fashion at the White House—and it’s turning heads for a few reasons.
OpenAI, SoftBank, and Oracle are teaming up on this venture, which aims to invest up to $500 billion over four years to build colossal AI data centers across the US. The initial deployment alone comes in at a tidy $100 billion. According to the announcement:
- OpenAI and SoftBank each commit $19 billion as lead partners.
- SoftBank manages the financing side of things.
- OpenAI handles operations.
- Oracle and a data center developer called Crusoe are already constructing the first massive complex in Texas.
This thing is so big that its backers say it could eventually surpass the inflation-adjusted cost of NASA’s Apollo program—and it’s got the potential to completely reshape the AI landscape. But, there's a lot of drama behind the scenes.
Beyond the headlines and hype, is Stargate for real?
I got all the details from Marketing AI Institute founder and CEO Paul Roetzer on Episode 132 of The Artificial Intelligence Show.
Why Stargate Matters
Compute power is the beating heart of frontier AI research. The largest AI models require jaw-dropping amounts of energy, money, and chips.
That’s where Stargate comes in. This new entity—reportedly a separate venture with OpenAI holding a large equity stake—plans to build multiple massive data centers dedicated exclusively to OpenAI’s needs. That means:
- Advanced AI chips: Tens of thousands (eventually hundreds of thousands) of Nvidia GPUs.
- Gigawatt-scale power demands: Enough to power a city the size of Austin, Texas.
- A spree of expansions: Future facilities are planned across the country.
If it all comes together, Stargate would dwarf most existing AI infrastructure projects in scale—and mark a major shift in how OpenAI (and possibly other AI companies) source the computing muscle they need.
But Is $500 Billion Even Realistic?
Here’s where it gets messy. That enormous $500 billion price tag might be more of a long-term target than a locked-in budget. OpenAI doesn’t actually have $500 billion lying around, so there’s plenty of speculation on how (and whether) they’ll raise the full amount.
Industry insiders are also skeptical about supply issues:
- Can they even source enough chips?
- Do they have sufficient energy resources for data centers of this size?
- Is some of this money actually going to be debt financed?
“It’s very apparent OpenAI doesn’t actually have this kind of money,” says Roetzer. “They’re going to have to raise it on their balance sheet.”
Microsoft, Musk, and a Mounting Feud
As if the financial hurdles weren’t complex enough, Stargate also reveals new tensions between OpenAI and its longtime deep-pocketed partner, Microsoft.
- Microsoft’s CapEx: Before Stargate, there were several reports that OpenAI was unhappy with how much compute Microsoft was making available. It's possible that Stargate is a response to those tensions.
- Exclusive deal drama: Microsoft reportedly allowed Sam Altman to pursue this separate infrastructure plan with Oracle, loosening the ties that once bound the companies together.
- Elon Musk enters the chat: Musk publicly cast doubt on the legitimacy of SoftBank’s “$19 billion,” prompting a mini-Twitter war. Altman shot back with offers to visit the first site under construction.
Then Satya Nadella waded into the conversation, joking that his own $80 billion is real, implying others might be playing fast and loose with the numbers. Elon Musk replied in agreement, firing a shot across Altman’s bow about hyping “unreal” AI investments.
It’s part soap opera, part trillion-dollar business dance—an ongoing saga that underscores how big AI has become (and how many big egos are now in play).
Ties to the New Administration
Stargate got unveiled just a day after President Trump’s inauguration, signaling a push for massive AI infrastructure growth in a deregulated environment. That lines up with what Roetzer has been predicting for some time:
“We said on the podcast many times it’s all about deregulation and acceleration of technology. How it plays out, who the winners are, that’s the question.”
Trump is no fan of wind or solar, so it’s unclear how that might influence the energy sources powering Stargate’s data centers. Meanwhile, other industry leaders like Elon Musk remain champions of renewables. The result: a storm of political, financial, and technical factors all colliding at once.
No matter how this shakes out though, there's one trend you can bet on, says Roetzer:
“Infrastructure and energy is going to drive everything in America for this coming half decade, if not more.”
What It All Means for AI (and Your Business)
Though the final scale and execution of Stargate remains up in the air, the broader implications are clear:
- Bigger AI Models Are Coming: If OpenAI (and others) can secure this kind of capital and compute capacity, the next wave of AI systems may dwarf even today’s largest models.
- Infrastructure Investment Is Surging: Roetzer expects we could see trillions poured into these projects over the next few years. If that’s even close to correct, it changes the playing field for everyone, from chip manufacturers to cloud vendors.
- Expect More Drama: With so much on the line—and so many huge personalities involved—feuds, alliances, and sudden twists are practically guaranteed.
- More Opportunity and Risks Are Coming: Massive expansions in AI capabilities bring new opportunities for businesses to innovate. But they also create new risks: more regulation battles, more volatility in markets, and bigger potential for ethical and economic disruption.
Despite its issues, Stargate does show a willingness by some AI leaders to commit to large-scale, moonshot-style funding for the infrastructure side of the AI equation. In that sense, it’s a major milestone—one that has the potential to shape the future of AI for a generation.
But given the swirling questions—about who’s truly paying, whether resources exist to execute, and how this affects relationships across the industry—nobody’s popping champagne just yet.
Mike Kaput
As Chief Content Officer, Mike Kaput uses content marketing, marketing strategy, and marketing technology to grow and scale traffic, leads, and revenue for Marketing AI Institute. Mike is the co-author of Marketing Artificial Intelligence: AI, Marketing and the Future of Business (Matt Holt Books, 2022). See Mike's full bio.