Oracle will build new data centres in the US to provide 4.5 gigawatts of computing power to the Stargate initiative. OpenAI has already agreed to rent the infrastructure, according to a report by Bloomberg.
Announced by President Donald Trump in January 2025, Stargate is a $500 billion generative AI infrastructure venture in the US, led by OpenAI, Oracle, Japanese telecoms giant SoftBank, and MGX, an investment firm based in the United Arab Emirates.
- OpenAI intends to operate the data centres.
- Oracle will provide server infrastructure and leasing.
- SoftBank handles capital investment.
- Nvidia will supply many of the chips.
Despite lofty plans, Oracle has so far opened just one facility in Abilene, Texas, where Denver-based startup Crusoe Energy handled the physical buildout. Its current capacity is approximately 1.2 gigawatts, but plans are in place to expand it to around 2 gigawatts, according to Bloomberg. To meet this energy demand, Crusoe and its partners are building an on-site natural gas power plant.
Other sites contributing to the 4.5 gigawatts OpenAI requires for the Stargate project may be developed in states such as Texas, Michigan, Wisconsin, Wyoming, New Mexico, Georgia, Ohio, or Pennsylvania.
However, many aspects of the project remain uncertain, according to anonymous sources. They also confirmed that the Stargate agreement comprises at least part of the $30 billion cloud services deal Oracle signed with a mystery customer last month.
OpenAI and Crusoe declined to comment on the plans, while Oracle didn’t return a request for comment, according to Bloomberg.
Stargate expansion requires enough electricity to power millions of homes, but tech companies insist it will be worth it
One gigawatt of energy can provide electricity to roughly 750,000 homes, meaning Stargate’s total demand could power several million. But data centres have also been known to cause power outages, put pressure on water supplies, and increase air pollution, resulting in pushback from those living in their vicinity.
Nevertheless, Stargate’s backers argue it will ultimately serve US interests by delivering socially beneficial technologies to Americans and securing the nation’s leadership in the global AI race, surpassing China.
“This infrastructure will secure American leadership in AI, create hundreds of thousands of American jobs, and generate massive economic benefit for the entire world,” OpenAI wrote on X when Stargate was announced. “This project will not only support the re-industrialization of the United States but also provide a strategic capability to protect the national security of America and its allies.”
Crusoe has committed to creating 357 full-time roles after the construction of the Abilene facility, while the city has committed to supporting the project’s water needs.
Investors could still get cold feet
While the message from Stargate is grow, grow, grow, investors have been more cautious.
As of May, SoftBank had yet to finalise a financing blueprint or begin detailed talks with banks and institutional investors. This delay was reportedly tied to Trump’s tariffs, which could drive up the cost of server racks, chips, and cooling systems.
There have also been wobbles when it comes to overbuilding, with signs in April that Amazon and Microsoft were scaling back their data centre commitments. Tariffs sparked fears that rising consumer tech prices could dampen demand for AI, while new low-cost models, such as those from Chinese startup DeepSeek, threatened to squeeze profit margins.
More recently, on Wednesday, S&P Global Ratings warned that Oracle’s heavy spending on AI and data centres had pushed its cash flow negative for fiscal 2025.
None of these roadblocks appears to have made any practical dent in the Stargate project, which doesn’t stop with the US. In May, plans were announced to build a massive AI data centre in Abu Dhabi, with the United Arab Emirates aiming to become a serious contender in the AI leadership race, as well as expand in other global nations.
Oracle’s co-founder, Larry Ellison, wants to upload all US national data — including highly sensitive personal information, such as genomic data — into an Oracle AI model for study. Find out more here.
