SoftBank and OpenAI’s Stargate Project Narrows Focus, Targets Ohio for First Small Data Center by Year-End

July 21 (Reuters) — Stargate, the massive AI infrastructure initiative spearheaded by ChatGPT creator OpenAI, Japanese conglomerate SoftBank (9434.T), and tech giant Oracle (ORCL.N), is dialing back its initial ambitions by pivoting to a more modest first phase — a smaller-scale data center that could break ground in Ohio before the end of 2025, the Wall Street Journal reported on Monday.

Originally unveiled as a $500 billion megaproject, Stargate was positioned by the companies and the White House as a critical lever for accelerating U.S. dominance in artificial intelligence and securing tens of thousands of high-paying tech and construction jobs across the country.

At a January gathering at the White House, President Donald Trump spotlighted the project as an example of how public-private partnerships could “bring manufacturing, data infrastructure, and next-generation innovation back to American soil,” aiming to outpace China’s rapid advances in AI and semiconductor capacity.

But behind the scenes, the Wall Street Journal reports, SoftBank and OpenAI have clashed over key elements of the plan — particularly site locations, energy sourcing, and investment phases — according to sources familiar with internal discussions.

Despite these challenges, both companies maintain that they are not backing away from their larger vision. In a joint statement to Reuters, OpenAI and SoftBank emphasized that they are moving “with urgency on site assessments” and exploring “multiple states” for additional projects beyond the first build.

When first announced, Stargate’s backers — including Oracle and other major equity partners — pledged an immediate $100 billion to launch construction, workforce training, and land acquisition, with the remaining funds to be invested gradually through 2029.

Oracle Chairman Larry Ellison reaffirmed the commitment at the launch, noting that “the first of the project’s data centers was already under construction in Texas,” with additional sites under consideration in energy-rich regions across the Midwest and Southwest.

Industry experts say the decision to begin with a smaller data center in Ohio could be a strategic move to test operational models and energy needs, especially as AI models like ChatGPT grow more power-hungry.

Meanwhile, President Trump has doubled down on energy infrastructure expansion, declaring a national energy emergency on his first day in office to “remove all regulatory obstacles” for oil and gas drilling, coal mining, and the development of new gas and nuclear power plants. These measures, his administration says, are intended to ensure the U.S. grid can support the next wave of AI and cloud computing capacity.

As AI spending surges, data center developers face mounting pressure to balance massive energy requirements with sustainability goals and local community impacts. Ohio, with its relatively affordable land, central location, and improving renewable energy options, has emerged as a contender for AI and cloud investments looking to scale quickly.

While Stargate’s initial site may be smaller than originally promised, industry watchers say its success could determine how fast the full $500 billion vision comes together — and whether the U.S. can maintain its technological edge amid fierce global competition.

Originally reported by Reuters.