OpenAI, an artificial intelligence startup, said Tuesday that it would work with Japanese conglomerate SoftBank and cloud computing company Oracle to build computing facilities in Lordstown, Ohio; Milam County, Texas; Shackelford, Texas; Doña Ana County, New Mexico; and a not-yet-named site in the Midwest.
The new data centres are part of a plan that the three companies unveiled in January with President Donald Trump at the White House. Under the plan, called the Stargate Project, the companies intend to spend $500 billion on new facilities for building AI technologies and delivering them to consumers and businesses.
With Tuesday’s announcement, OpenAI said that it now had agreements in place to build more than $400 billion in data centre infrastructure. It must negotiate additional deals to reach its goal of $500 billion.
Oracle will pay for and oversee the construction of three of the new data centres. OpenAI will then purchase computing power from Oracle. Oracle’s co-chief executive Clay Magouyrk said that the cloud computing giant would pay for the construction of these facilities partly by exploring new kinds of financial deals with various partners, technology providers and other investors.
“It is a combination of working with all the right partners and providers to bring all of their capital to bear as well as interesting new corporate structures and interesting new ways of doing financing,” he said.
SoftBank intends to pay for its two facilities, in Ohio and Milam County, Texas, by raising funds from banks and taking on debt, according to a source familiar with the arrangement who spoke on the condition of anonymity. OpenAI will oversee construction.
The announcement is part of a wider effort among tech companies to build data centres for AI around the world. OpenAI, Amazon, Google, Meta and Microsoft plan to spend more than $325 billion combined on these facilities by the end of the year. OpenAI’s efforts received a shot in the arm Monday, when Nvidia said it intended to invest $100 billion in the startup over the next several years.
The Nvidia deal was another example of OpenAI raising money from the tech giants it relies on for products and services. Microsoft, which invested more than $13 billion in OpenAI from 2019 to 2023, made billions of dollars after the startup paid it for the computing power needed to build and deliver AI technologies like the chatbot ChatGPT.
Nvidia has made an initial investment of $10 billion at OpenAI’s current valuation of $500 billion. This gives Nvidia a roughly 2% stake in the startup. The chipmaker plans to make nine additional $10 billion investments as OpenAI continues to build data centres with its partners.
Many experts worry that companies like OpenAI could shoulder enormous debts if AI technologies are not adopted as quickly as the companies believe they will be. Though OpenAI is pulling in billions of dollars in revenue, it is spending tens of billions more, mostly on computing power.
As part of the Stargate Project, OpenAI and Oracle are already building a data centre in Abilene, Texas, which the companies showed off to a group of reporters Tuesday. The companies plan to build eight data centres that consume about 1.4 gigawatt of electricity, enough to power hundreds of thousands of homes. Two of these data centres are now up and running.
OpenAI also plans to build a computing facility in the United Arab Emirates, following an agreement between the Trump administration and the Persian Gulf nation. That data centre is part of a venture with Oracle, SoftBank, the UAE artificial intelligence firm G42 and others.