Sipu Jha
OpenAI‘s $500 billion Stargate data centre project—announced with fanfare at the White House in January 2025—has quietly unravelled into a mess of stalled timelines, financing headaches, and partners who can’t agree on who’s in charge. What was supposed to be the largest AI infrastructure project in history is now turning to be cautionary tale.More than a year after US President Donald Trump stood alongside Sam Altman, Masayoshi Son, and Larry Ellison to unveil Stargate, the joint venture has not staffed up, has not broken ground on a single facility, and remains stuck in a three-way disagreement over control, financing, and site ownership, according to a detailed investigation by The Information.The original promise was bold: $100 billion in immediate spending, 10 gigawatts of AI data centre capacity, and execution at breakneck speed. The reality? OpenAI missed its target of locking in 10 GW by end of 2025, managing only about 7.5 GW. Its projected compute spending through 2030 ballooned from $450 billion to $665 billion. And the Stargate JV itself—the entity that was supposed to coordinate it all—has essentially been sitting idle while OpenAI routed around it with bilateral deals.
OpenAI tried going solo—lenders said no
Faced with a gridlocked partnership, OpenAI explored building and owning its own data centres. The company scouted US sites, hired a general contractor, and began preparing to develop large campuses independently. The goal was to cut its dependence on third-party cloud providers, which are more expensive over time, and take direct control of its compute destiny.But lenders were not on board. Banks balked at financing multibillion-dollar construction projects tied directly to a company that was burning billions in cash annually—roughly $8 billion in 2025 alone—with no proven path to sustained profitability. OpenAI shelved the self-build plan, and in the process lost its general contractor due to the delays.That forced it back to the negotiating table. But rather than work through the Stargate JV, OpenAI went around it entirely. It struck a bilateral deal with Oracle in mid-2025 for 4.5 GW of capacity across multiple US sites, later escalating into a $300 billion, five-year cloud computing contract. Separately, it signed compute deals with Amazon Web Services and Google Cloud to cover near-term shortages, and locked in a $22.4 billion arrangement with CoreWeave. In total, OpenAI has committed roughly $600 billion in infrastructure agreements—all negotiated outside the venture that was supposed to be the single point of coordination.
SoftBank and OpenAI clashed over who gets to own what
The Texas campus—originally envisioned as OpenAI’s first self-built data centre—became a flashpoint. After Oracle negotiations paused construction and OpenAI lost its contractor, the company brought SoftBank in as a partner for the site. But the two sides immediately clashed over ownership. OpenAI wanted to control the facility. SoftBank wanted to develop and own it.Sources say the impasse required multiple trips to Tokyo between September and October, with marathon negotiation sessions at SoftBank’s headquarters reportedly fuelled by 7-Eleven snacks. The compromise: SoftBank would own and develop the Texas site, while OpenAI would control its design and hold a long-term lease on the facility. Even after that, SoftBank had to pause a planned $50 billion acquisition of data centre operator Switch due to regulatory hurdles.Elon Musk weighed in on announcement day itself, posting on X: “They don’t actually have the money.” He followed up claiming SoftBank had secured well under $10 billion at that point. Altman fired back, inviting Musk to visit the first site already under way, and adding a pointed jab: “I realize what is great for the country isn’t always what’s optimal for your companies.”
Oracle’s $300 billion gamble is rattling Wall Street
Oracle, which has positioned itself as the financial backbone of Stargate, is dealing with the sharpest blowback. The company has piled up over $100 billion in debt—$38 billion for data centres in Texas and Wisconsin, $20 billion for a New Mexico campus—and its stock has lost roughly half its value since peaking in September 2025, erasing approximately $463 billion in market cap.S&P Global has placed Oracle’s BBB credit rating on negative watch, and some of its bonds—including a 10-year note issued in September—have been trading like junk debt. Credit default swaps, essentially insurance against Oracle defaulting, spiked in November and haven’t come down. Investor Michael Burry has reportedly placed an options bet against the stock.Investment bank TD Cowen estimates the OpenAI contract alone will require around $156 billion in capital spending and roughly 3 million GPUs. To fund this, Oracle may cut 20,000 to 30,000 jobs, freeing up $8–10 billion in cash flow. The company is also reportedly weighing a sale of Cerner, the healthcare software unit it acquired for $28.3 billion in 2022, and has started asking new customers to pay up to 40% of contract value upfront.Oracle’s attempts at damage control have consistently backfired. A post on X in early February insisting the stalled Nvidia-OpenAI deal had “zero impact” on its financial relationship with OpenAI sent shares sliding nearly 3%. Venture capitalist Alex Kolicich summed up the mood: “This is literally bank-run language.”
OpenAI is now telling investors a very different number
Perhaps the clearest sign of a reality check: OpenAI has dramatically cut its spending projections. After months of touting $1.4 trillion in infrastructure commitments, the company is now telling investors it’s targeting around $600 billion in total compute spend through 2030, according to CNBC. That’s less than half the original figure.The company made $13.1 billion in revenue last year—above its $10 billion target—but still burned through $8 billion. It is now projecting $280 billion in revenue by 2030, with roughly equal contributions from consumer and enterprise businesses. OpenAI is also finalising a massive funding round expected to exceed $100 billion and value the company at $730 billion pre-money. Nvidia is in discussions to invest up to $30 billion, replacing the $100 billion multi-year commitment announced in September that CEO Jensen Huang later confirmed was non-binding and never finalised. SoftBank is in talks for another $30 billion, and Amazon could invest up to $50 billion as part of a broader partnership.But the circular financing structure continues to make analysts uneasy. Nvidia invests in OpenAI, which buys Nvidia chips. Oracle builds data centres for OpenAI, then charges OpenAI to use them. Everyone’s balance sheet depends on everyone else following through. As one market commentator put it: “It all works until one party slows down—and suddenly everyone feels it.”
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