OpenAI’s ambitious Stargate data center initiative is reportedly encountering significant delays due to economic uncertainties linked to tariffs. The proposed project aims to establish extensive AI infrastructure both within the U.S. and internationally and seeks to raise as much as $500 million in funding. However, investor appetite for the venture has cooled amid increasing market volatility and the availability of cheaper alternatives for AI services.
SoftBank, which earlier indicated it would be a major investor in the Stargate project, has reportedly yet to formalize financing arrangements or initiate detailed conversations with potential backers. This hesitation among investors—including banks, private equity firms, and asset management groups—is primarily fueled by concerns that tariff hikes on critical components such as server racks, cooling mechanisms, and semiconductor chips could increase overall construction expenses by an estimated 5-15%, according to analysis cited in recent reporting.
Moreover, investor caution has intensified due to fears of possible overcapacity in the data center market. A number of big tech companies like Amazon and Microsoft have already scaled back or adjusted their own data center expansion plans, raising alarms within the financial community about the risk of surplus infrastructure and diminished returns on investments in similar projects.
Together, these conditions have placed OpenAI’s Stargate project into uncertain territory, challenging its ability to secure the necessary financing and delaying its timeline considerably.
