When SoftBank founder Masayoshi Son and OpenAI’s Sam Altman announced the Stargate project back in January, the tech world took notice.
A massive $100 billion investment to build state-of-the-art AI infrastructure, with ambitions to raise it to $500 billion over time, promised a leap forward in how AI is trained and deployed. But months later, the much-hyped venture is stalling despite initial excitement from investors and banks.
Financing freezes as trade tensions rise
Economic risks related to US tariffs, particularly on server racks, chips, and cooling systems, are now threatening to derail key financing talks. SoftBank has yet to finalize a financing blueprint or start detailed negotiations with banks and institutional investors.
Preliminary conversations with financial giants, including JPMorgan, Apollo Global Management, and Brookfield Asset Management, have occurred. But none have moved forward with firm commitments, people familiar with the talks told Bloomberg.
The delays come as global trade tensions escalate under President Donald Trump’s tariff policies. According to TD Cowen analysts cited by Bloomberg, these new tariffs could raise data center build costs by 5% to 15%, with some suppliers facing even steeper increases.
SoftBank and OpenAI are quiet on setbacks
Neither SoftBank nor OpenAI has publicly commented on the financing delays. However, Altman confirmed during a congressional hearing last week that he visited Stargate’s first data center site in Abilene, Texas, calling it “the largest AI training facility in the world.” That facility, under development by Oracle, is moving forward despite the broader Stargate financing issues.
Meanwhile, SoftBank has assembled a team of 20 to 30 people within its Vision Fund to focus exclusively on Stargate. Among them is Vikas J. Parekh, managing partner for the Americas and a key figure in SoftBank’s AI investment strategy.
Investors are growing wary of overcapacity
The broader AI sector is still booming, but some investors are becoming cautious about overbuilding.
Microsoft is reportedly pulling back on specific data center projects globally. Amazon has slowed growth at its AWS division, despite a still solid 17% year-over-year growth rate, as noted by Bloomberg.
There’s also concern about the rise of cheaper AI alternatives. New models, such as those from Chinese startup DeepSeek, are making some investors question the long-term profitability of Stargate’s massive infrastructure plan.
OpenAI has been weathering internal and external turbulence. Earlier this month, Altman had to walk back plans to transition OpenAI into a full for-profit entity after facing public pushback.
High hopes amid market jitters
For Masayoshi Son, the tariff worries are just short-term bumps. According to people familiar with his thinking, he sees AI as a long-term growth engine with exponential returns.
Richard Kaye, co-head of Japan equity strategy at Comgest Asset Management and a long-time SoftBank investor, told Bloomberg, “It would be great to be able to say exactly where all the money’s going in the next couple of quarters. I don’t think anybody can right now, and probably Mr. Son himself hasn’t decided.”
Still, Kaye believes the project could return 15% to 20% on a $50 billion investment within five to six years, if the right conditions are met.
SEE on our sister site eWeek more news about Stargate that includes OpenAI, Oracle, NVIDIA