Opening the Stargate: Tech Giants to Invest $500B in AI Data Center InfrastructureOpening the Stargate: Tech Giants to Invest $500B in AI Data Center Infrastructure

A consortium of tech giants plans to invest $500 billion over the next four years in developing AI infrastructure in the U.S.

Unveiled yesterday (Jan. 21), the Stargate Project has the backing of SoftBank, OpenAI, Oracle, and MGX, with Arm, Microsoft, and Nvidia also involved as key technology partners.

Executives from the principal joint venture partners joined U.S. President Donald Trump at the White House to outline the project.

Stargate will include 10 data centers, including one already under construction in Texas, said Larry Ellison, Oracle’s chairman and chief technology officer. He added that the venture could potentially expand to include up to 20 data center projects.

“Beginning immediately, Stargate will be building the physical and virtual infrastructure to power the next generation of advancements in AI,” said Trump during the press conference.

Infrastructure Investment

SoftBank and OpenAI are the lead partners for Stargate, with SoftBank having financial responsibility and OpenAI having operational responsibility.

“This infrastructure will secure American leadership in AI, create hundreds of thousands of American jobs, and generate massive economic benefit for the entire world,” OpenAI said in a news release.

“This project will not only support the re-industrialization of the United States but also provide a strategic capability to protect the national security of America and its allies. We will begin deploying $100 billion immediately.”

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Peak Demand

The Stargate announcement comes as the global data center industry continues to experience a surge in demand.

An estimated 10 GW of capacity is expected to break ground across the hyperscale and colocation segments this year, according to JLL’s 2025 Global Data Center Outlook.

The report highlighted the significant impact of AI on data center design and efficiency, with the increasing adoption of AI already resulting in higher energy demands.

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Andy Cvengros, co-lead of U.S. data center markets at JLL, told Data Center Knowledge the company is seeing a lot of continued growth in secondary markets, including Richmond in Virginia, south Dallas, west Chicago, Atlanta, Ohio, northern Indiana, and others.

“This is driven by power and land availability at a lower cost basis than the core markets,” he said.

Implementation Challenges

While the multibillion-dollar announcement has garnered attention across industries, Alan Howard, principal analyst at Omdia, noted that the project may face implementation challenges.

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“Even if you have $500 billion to spend on data centers, will you be able to spend it, and will you be able to get the power?” Howard told Data Center Knowledge. “The timeline to create a data center can be 5+ years if you’re starting from scratch.”

Howard added: “Elon Musk put together the xAI data center in mere months, but I think that is the exception, not the rule. I’d imagine in that case, economics common in commissioning a data center were not a big deal, meaning they may have spent more on some things than most builders would have in four years, considering typical data center development timelines.”