Jamie Spencer
SoftBank and OpenAI’s plan to invest $100 billion in artificial intelligence infrastructure in the U.S. as part of the Stargate project has been delayed for several months, according to a report. The project, which was touted as a major move for AI development in the U.S., has faced obstacles due to concerns over President Trump’s tariffs that could significantly increase the costs of building data centers.
Delays in the Stargate Project
Masayoshi Son, CEO of Japan-based SoftBank, and Sam Altman, co-founder of OpenAI, initially promised to deploy $100 billion immediately, with plans to increase the investment to $500 billion over the next four years. The two companies made the announcement during a White House briefing shortly after Trump’s inauguration. However, despite early-stage talks with numerous lenders and asset managers, including Mizuho, JPMorgan, Apollo Global Management, and Brookfield Asset Management, no deals have been completed.
The Impact of Tariffs on Data Center Projects
Sources familiar with the matter told Bloomberg that fears of President Trump’s tariffs have made investors hesitant to move forward with the project. The import taxes could raise the costs of building data centers by anywhere from 5% to 15%, according to analysis by TD Cowen. As a result, SoftBank and OpenAI have faced difficulties in securing the necessary financial backing for their ambitious AI infrastructure plans.
The Stargate Project’s Ambitious Goals
Trump had touted the Stargate project as a prime example of U.S. investments under his leadership. The project aims to build up to 20 massive data centers across the country, which would play a significant role in advancing AI research and development. SoftBank is in charge of financing the project and has assembled a team of 20 to 30 people to expedite its progress. The project is also supported by companies like Oracle and MGX.
China’s DeepSeek AI Model Poses a Challenge
Despite these efforts, the rise of China’s DeepSeek AI model, which claims to have been developed with relatively little time and funding, has caused concern in Wall Street. Some investors are now questioning whether multi-million dollar data center ventures, like Stargate, are worth the investment in the face of cheaper alternatives. However, the Stargate project has seen some progress, with the first data center site in Abilene, Texas, being developed by Oracle. This facility, once completed, will become the largest AI training facility in the world, according to Altman.
OpenAI’s Legal Troubles with Elon Musk
In addition to financial challenges, OpenAI is also dealing with legal issues. Elon Musk, who co-founded OpenAI but later cut ties with the organization, is attempting to block the company’s plan to restructure and become a for-profit entity. Musk even made a $97.4 billion unsolicited offer to take over OpenAI, but Altman quickly dismissed it, further escalating the legal conflict between the two parties.
