The Stargate mega project continues to gather pace. In the latest developments, Oracle and OpenAI have advanced their existing partnership on the project, with Oracle agreeing to provide 4.5 gigawatts (GW) of additional data center capacity in the U.S.
“Together with our Stargate I site in Abilene, Texas, this additional partnership with Oracle will bring us to over 5 gigawatts of Stargate AI data center capacity under development, which will run over 2 million chips,” reads an OpenAI press release about the extended capacity.
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Recap
Before I delve into the implications of the deal within the broader context of Stargate, let’s recall what the project is and what it aims to accomplish.
Overview: The Stargate Project is a company that plans to invest $500 billion between 2025 and 2029 in building new AI infrastructure for OpenAI in the U.S. The goal of this project is to strengthen U.S. leadership in the AI sector by providing the most cutting-edge infrastructure.
In broader terms, the project aims to create hundreds of thousands of jobs for U.S. workers and to re-imagine U.S. industrialization. Additionally, it seeks to enhance security for the U.S. and its allies.
Funding: The initial investors in this project include the Japanese financial giant SoftBank, OpenAI, Oracle, and the UAE tech investment firm MGX. British semiconductor and software design company Arm, along with Microsoft, NVIDIA, Oracle, and OpenAI, are the core technology partners.
Leadership: SoftBank and OpenAI are the lead partners. While SoftBank has financial responsibility for Stargate, OpenAI has operational control. The chairman of the project is SoftBank CEO Masayoshi Son.
Progress: The first stage of construction, Stargate I, has begun in Abilene, Texas, with some of the facility already operating. This follows the recent delivery of NVIDIA GB200 racks through Oracle.
What Next?
The ultimate goal of Stargate is to invest $500 billion into 10 GW of U.S.-based AI infrastructure. To that end, the addition of 4.5 GW by Oracle represents a significant leap forward in achieving an ambitious target. In fact, OpenAI says, “We now expect to exceed our initial commitment thanks to strong momentum with partners including Oracle and SoftBank.”
Regarding job creation, another significant aspect of the Stargate project is that OpenAI estimates the construction and operation of an additional 4.5 GW of data center capacity will create approximately 100,000 jobs in construction and operations.
So what does this mean for Oracle? Avid Cloud Wars viewers/listeners/readers may remember a story I covered a few weeks ago that discussed a huge cloud deal expected to generate $30 billion in annual cloud revenue by 2028.
Well, guess what? The customer behind the deal, which was still undisclosed at the time of recording, is OpenAI. This deal has enormous ramifications for Oracle. On the day the news broke, Oracle Chairman Larry Ellison became the second-richest person in the world as Oracle’s stock price hit an all-time high.
To satisfy the order, support the U.S. leadership in AI infrastructure, and justify the $30 billion annual cost, Oracle has significant work ahead. “Oracle will be the number one builder and operator of cloud infrastructure data centres,” said Ellison during the fiscal Q4 2025 earnings call back in early June. We will build and operate more cloud infrastructure data centres than all of our cloud infrastructure competitors.”
This was a little hint at what we now know is a 4.5 GW commitment to Stargate, which will involve massive data center build-outs, AI-optimized infrastructure, and strong, strategic partnerships that build on Oracle’s existing agreements.
However, Oracle has positioned itself perfectly. In addition to supporting a massive AI infrastructure build-out through direct investment and technological support — one that will no doubt propel U.S. and allied tech firms into the stratosphere — the company’s stock price is skyrocketing.
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Bob Evans
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