Digital Event Horizon
OpenAI, Oracle, and SoftBank have announced a massive expansion of their joint AI infrastructure project, Stargate, which aims to handle ChatGPT's 700 million weekly users and train future AI models. The buildout represents a significant commitment to AI-driven growth, but concerns about the underlying technology and circular investment structure remain. Will this ambitious plan succeed, or will it burst like other tech bubbles of the past?
OpenAI, Oracle, and SoftBank are investing $400 billion in five new US AI data center sites as part of their Stargate joint project.The five new sites will deliver over 5.5 gigawatts of capacity and can handle ChatGPT's 700 million weekly users.The partnership involves circular investment structure, with infrastructure providers investing in AI companies that become their biggest customers.Industry observers are scrutinizing the financial structure due to concerns about genuine economic investments and accounting maneuvers.The expansion aims to meet growing demand for AI capabilities, but critics question whether it can sustain itself.The Stargate project expects to create over 25,000 onsite jobs and represents a significant commitment to AI-driven growth.
OpenAI, Oracle, and SoftBank have announced plans for five new US AI data center sites as part of their joint AI infrastructure project, Stargate. The massive buildout aims to handle ChatGPT's 700 million weekly users and train future AI models, bringing the platform to nearly 7 gigawatts of planned capacity and over $400 billion in investment over the next three years.
The five new sites will include three locations developed through an OpenAI and Oracle partnership: Shackelford County, Texas; Doña Ana County, New Mexico; and an unspecified Midwest location. These sites, along with a 600-megawatt expansion near the flagship Stargate site in Abilene, Texas, can deliver over 5.5 gigawatts of capacity, which means the computers on site will be able to draw up to 5.5 billion watts of electricity when running at full load.
The new sites will join the flagship Stargate campus in Abilene, Texas, where Oracle began delivering Nvidia hardware in June and OpenAI has already begun training and inference using the data center. The agreements between OpenAI, Oracle, and Nvidia have drawn scrutiny from industry observers due to their circular investment structure, which involves infrastructure providers investing in AI companies that become their biggest customers.
The financial structure of these deals has raised eyebrows about whether these represent genuine economic investments or elaborate accounting maneuvers. The arrangements are becoming even more convoluted, with Nvidia discussing leasing its chips to OpenAI rather than selling them outright. This new structure adds yet another layer of circular financial engineering to the complicated relationships between these companies.
The expansion is seen as a response to the growing demand for AI capabilities, which has led to severe capacity constraints for OpenAI's existing infrastructure. ChatGPT serves 700 million weekly active users, more than double the US population, who regularly use the AI assistant to develop software, provide personal advice, and compose or edit correspondence and reports.
However, critics question whether the investment structure can sustain itself, particularly in light of concerns about the underlying technology and warnings of an AI bubble. OpenAI CEO Sam Altman has expressed optimism about the usefulness of future AI systems, but despite these assurances, there is still actual unmet demand for generative AI capacity today.
The massive buildout aims to handle ChatGPT's 700 million weekly users and train future AI models, which compounds the problem of meeting current demand. On top of running existing AI models, OpenAI is constantly working on new technology in the background, requiring thousands of specialized chips running continuously for months.
The Stargate infrastructure project represents a significant commitment to AI-driven growth, with the companies expecting the sites to create over 25,000 onsite jobs. However, the future of these investments remains uncertain, and industry observers will be watching closely as the bubble forms around these ambitious plans.
Related Information:
https://www.digitaleventhorizon.com/articles/The-Stargate-Infrastructure-Ouroboros-A-Circle-of-Circular-Investments-and-AI-Driven-Growth-deh.shtml
https://arstechnica.com/ai/2025/09/why-does-openai-need-six-giant-data-centers/
https://www.hashe.com/tech-news/why-does-openai-need-six-giant-data-centers/
Published: Wed Sep 24 15:26:22 2025 by llama3.2 3B Q4_K_M
