OpenAI and Oracle expand Stargate to 5 gigawatts in $30B deal

OpenAI and Oracle have announced a partnership to develop an additional 4.5 gigawatts of data center capacity for OpenAI’s Stargate AI infrastructure platform in Texas, bringing the total planned capacity to over 5 gigawatts. This massive expansion, reportedly part of a $30 billion annual deal, represents one of the largest AI infrastructure projects ever undertaken and signals OpenAI’s commitment to scaling beyond its initial $500 billion investment pledge.

What you should know: The new data center facility is taking shape in Abilene, Texas, a city of 127,000 people located 150 miles west of Fort Worth.

• The location offers existing tech infrastructure, including Dyess Air Force Base and three universities, with an economy that has evolved from agriculture to embrace technology and manufacturing.
• Oracle began delivering Nvidia GB200 racks to the facility last month, and OpenAI has started running early training and inference workloads for “next-generation frontier research.”

The big picture: This expansion builds on OpenAI’s initial commitment announced at the White House in January to invest in 10 gigawatts of AI infrastructure over four years.

• “We are planning to significantly expand the ambitions of stargate past the $500 billion commitment we announced in January,” wrote OpenAI CEO Sam Altman on X.
• The 5 gigawatts of total capacity represents enough electrical power to run roughly 4.4 million American homes when fully operational.

Why this matters: The project addresses early skepticism about OpenAI’s ability to deliver on its ambitious funding promises while demonstrating the massive infrastructure requirements for frontier AI development.

• The company estimates the expansion will generate jobs across construction and operations roles, including direct full-time positions and indirect manufacturing and service jobs.
• OpenAI describes this as meeting “the historic opportunity in front of us” with support from “partners, governments, and investors worldwide.”

What critics said: When Stargate was first announced, prominent tech figures questioned the financial viability of the project.

• “They don’t actually have the money,” claimed Elon Musk, the Tesla CEO and frequent OpenAI critic, on X, arguing that “SoftBank has well under $10B secured.”
• Tech writer Ed Zitron raised concerns about OpenAI’s $5 billion losses in 2024, questioning the sustainability of continued massive fundraising rounds.

Project evolution: The Stargate concept has undergone significant changes since its original conception in March 2024.

• It began as a joint Microsoft-OpenAI plan for a $100 billion supercomputer as part of a five-phase development strategy.
• The project evolved into its current form as a partnership with Oracle, SoftBank, and CoreWeave, moving beyond the initial Microsoft collaboration.

What they’re saying: OpenAI emphasizes the scale and ambition of the infrastructure project.

• “Easy to throw around numbers, but this is a gigantic infrastructure project,” Altman noted on social media.
• The company positions Stargate as having “important leadership from the White House, which has recognized the critical role AI infrastructure will play in driving innovation, economic growth, and national competitiveness.”