SoftBank and OpenAI's Stargate Project Stalls Over Tariff-Induced Economic Uncertainty

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Updated May 12, 2025, 05:57 PM

SoftBank Group Corp. and OpenAI's ambitious $100 billion investment in AI infrastructure, known as the Stargate project, is facing significant delays due to economic uncertainty stemming from tariffs. The project, which aims to build up to 20 massive data centers across the U.S., has been slowed by fears that President Trump's tariffs could increase construction costs by 5% to 15%, according to an analysis by TD Cowen.

Despite early-stage talks with potential lenders and investors such as Mizuho, JPMorgan, Apollo Global Management, and Brookfield Asset Management, no financing deals have been finalized. SoftBank, tasked with leading the financing efforts and headed by Masayoshi Son, has yet to develop a financing template or engage in detailed discussions with potential backers, further complicating the project's progress.

The Stargate project, which was promised by Sam Altman and Masayoshi Son to deploy $100 billion immediately with plans to raise that figure to $500 billion over four years, is also facing challenges from the rapid evolution of AI technology. Cheaper AI models are emerging, causing investors to question the long-term profitability of such large-scale data center ventures. The project, backed by Oracle and MGX, has seen some progress with the development of a data center in Abilene, Texas, but the overall $500M moonshot remains stalled due to a 15% increase in hardware costs from tariffs.

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#OpenAI #Stargate #Trump #TD Cowen #Mizuho #JPMorgan #Apollo Global Management #Brookfield Asset Management #SoftBank #Masayoshi Son #Sam Altman #Oracle #MGX #Abilene #Texas

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Sources

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NY Post Business

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SoftBank, OpenAI's $100B investment delayed due to tariffs: report

New York Post

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SoftBank, OpenAI’s $100B investment delayed due to tariffs: report

Mario Nawfal

@MarioNawfal

🇺🇸 STARGATE HITS TURBULENCE — OPENAI’S MEGA DATA CENTER STALLED BY TARIFFS OpenAI’s Stargate project—a $500M moonshot for next-gen AI infrastructure—is reportedly stuck on the launchpad. Tariffs are rattling the economics, spiking hardware costs by up to 15%. Investors are