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OpenAI, Oracle Expand AI Infrastructure Partnership Amid Questions Over Funding

Companies announce 4.5 gigawatt data center expansion as Stargate project faces scrutiny over ambitious goals

• By John K. Waters
• 07/22/2025

OpenAI and Oracle Corp announced Tuesday they will develop an additional 4.5 gigawatts of data center capacity, expanding their artificial intelligence infrastructure partnership despite ongoing questions about the viability of the broader Stargate initiative's $500 billion funding commitment.

The expansion brings total Stargate capacity under development to more than 5 gigawatts across multiple facilities, designed to run over 2 million chips. The announcement comes one day after The Wall Street Journal reported that the Stargate project has struggled to gain momentum and scaled back near-term plans.

Mixed Progress on Ambitious Timeline
The Stargate initiative, unveiled by President Donald Trump at the White House in January, represents one of the most ambitious AI infrastructure projects in U.S. history. A joint venture that includes OpenAI, Oracle, and Japan's SoftBank Group aims to deploy 10 gigawatts of computing capacity over four years.

Construction is progressing on Stargate I in Abilene, Texas, where parts of the facility are now operational. Oracle began delivering Nvidia GB200 computing racks last month, and OpenAI said it has started running early training and inference workloads at the site. The Texas facility has created thousands of jobs, according to OpenAI, including specialized positions for electricians and technicians.

However, the project faces significant hurdles. Industry analysts have questioned whether the venture can secure the necessary funding, including an initial $100 billion for immediate deployment. Tesla CEO Elon Musk dismissed the group in January, saying "they don't actually have the money."

Scaled-Back Expectations
Recent reports suggest the partners have adjusted their timeline. The Wall Street Journal reported Monday that OpenAI and SoftBank have been at odds with each other, and Stargate is now setting a more modest goal of opening a small data center by the end of 2025, likely in Ohio.

The companies dispute suggestions of significant setbacks. "Together, we're committed to delivering 10GW of new compute capacity through Stargate," OpenAI and SoftBank said in a joint statement to CNBC. "We're moving with urgency on site assessments and reimagining how data centers are designed to power advanced AI."

Economic and Strategic Implications
OpenAI estimates the additional 4.5 gigawatts of capacity announced Tuesday will create more than 100,000 jobs across construction and operations roles. The broader Stargate initiative is expected to generate hundreds of thousands of jobs over several years.

The push for massive AI infrastructure reflects intensifying competition with China and growing demand for computing power to run generative AI services like ChatGPT and Microsoft's Copilot. The Biden and Trump administrations have both prioritized AI infrastructure as critical to maintaining U.S. technological leadership.

Technology companies are pouring billions into data center construction. Microsoft, which backs OpenAI, continues to provide cloud services through the partnership while Oracle and SoftBank handle the infrastructure expansion.

Funding Structure Remains Unclear
The Tuesday announcement did not disclose specific locations or funding details for the new facilities. Reports in January indicated OpenAI and SoftBank would each commit $19 billion to fund Stargate, though the complete financial structure of the $500 billion commitment remains unclear.

The companies said they now expect to exceed their initial commitment thanks to "strong momentum" with partners, though they provided no specific timeline or funding breakdown for achieving the full 10 gigawatt goal.
Oracle did not immediately respond to requests for comment. The White House declined to comment on Tuesday's announcement.

The expansion represents a significant test of whether private companies can deliver on infrastructure promises that match the scale of government-level investment programs, as the U.S. seeks to maintain its edge in the global AI race.