OpenAI's ambitious $500 billion Stargate project is facing mounting delays as concerns over rising tariffs and market uncertainty erode investor enthusiasm, people familiar with the matter told Bloomberg. The plan, backed by OpenAI and Japan's SoftBank, aims to construct up to 20 large-scale AI data centers across the United States and abroad, but the project's financing efforts have stalled amid fears of soaring infrastructure costs.
President Donald Trump has championed Stargate as a signature example of renewed domestic investment in U.S. technology, following a White House briefing earlier this year where SoftBank CEO Masayoshi Son and OpenAI CEO Sam Altman pledged an initial $100 billion commitment. Despite the headline-making promise, key financial players remain on the sidelines.
Bloomberg reported that SoftBank, which is leading the financing effort, has yet to finalize a funding framework or begin formal discussions with major backers. Among the early-stage contacts were JPMorgan, Mizuho, Apollo Global Management, and Brookfield Asset Management.
TD Cowen analysts estimate that tariffs on server racks, chips, cooling systems, and other components could raise the cost of data center construction by 5% to 15%, contributing to investor hesitation. "Steep tariffs and warnings of a recession have investors shying away from costly data center projects," one source told Bloomberg.
Market saturation concerns are also dampening enthusiasm. Companies such as Microsoft and Amazon have reportedly scaled back their data center investments in recent quarters, fueling fears of oversupply.
SoftBank has deployed a team of 20 to 30 people to accelerate Stargate's rollout, according to the report. Oracle and MGX are also supporting the effort, which includes the development of what OpenAI describes as the world's largest AI training facility in Abilene, Texas. "I visited our first site in Abilene last week," Altman said at a recent congressional hearing. "It's being developed by Oracle and will be the largest AI training facility in the world."
