Oracle Corporation (NYSE:ORCL) has partnered with OpenAI to expand the Stargate data center capacity in the U.S. by 4.5 gigawatts. This strategic investment aims to bolster the U.S.’s AI leadership and foster industrial growth.
What Happened: As announced by OpenAI on Tuesday, the partnership aims to develop an additional 4.5 gigawatts of Stargate data center capacity. This move is anticipated to speed up America’s reindustrialization and further U.S. AI leadership.
The deal represents a major milestone for Stargate, OpenAI’s AI infrastructure platform. With the addition of this new partnership with Oracle to the existing Stargate I site in Abilene, Texas, the total AI data center capacity under development will exceed 5 gigawatts.
This development marks a major step forward in OpenAI's pledge, made at the White House in January, to invest $500 billion in 10 gigawatts of AI infrastructure across the U.S. over the next four years. With strong support from partners like Oracle and SoftBank Group (OTC:SFTBF), the company now anticipates surpassing that original goal.
“We now expect to exceed our initial commitment thanks to strong momentum with partners including Oracle and SoftBank,” stated OpenAI.
Why It Matters: The partnership comes at a crucial time for OpenAI amid reports that the $500 billion Stargate project, a joint venture between OpenAI and SoftBank, ran into major delays and scaled-back ambitions.
Furthermore, Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk expressed doubts about the project’s financial backing. Musk posted on X, reiterating his January comment. “They simply don’t,” he wrote, responding to a user who reposted his earlier remark—”They don’t actually have the money.”
Despite these challenges, OpenAI’s aggressive spending on talent and R&D, termed as “vibe spending” by JPMorgan analysts, has been a cause of concern for investors. The partnership with Oracle could provide the necessary boost to OpenAI’s ambitious AI infrastructure plans and alleviate investor concerns.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
