In January 2025, SoftBank, OpenAI, Oracle, and Abu Dhabi’s MGX unveiled a joint venture named Stargate/“Gateway to the Stars”, intended to invest up to $500 billion by 2029 in AI-focused data centers across the U.S. and globally
An initial $100 billion was pledged to roll out infrastructure immediately, and the long-term plan includes building between five to ten U.S. GPU-equipped campuses, with potential expansion to the UAE and Japan
Why the Struggle to Launch?
1. Financing Falls Short
Despite the bold promise, only $50 billion in firm commitments have materialized so far. Of that, $20 billion comes from Abu Dhabi’s G42 for UAE deployment. SoftBank and OpenAI have pledged approximately $18 billion each, but only $7.5 billion has been disbursed to date
2. Investor Hesitancy & Economic Headwinds
Interest from lenders and investors like JPMorgan and Apollo has been cautious due to concerns about potential economic downturn and rising construction costs amid proposed tariffs (which may add 5–15%) New York Post.
3. Debt‑Heavy, Complex Funding Models
SoftBank is exploring project financing—a model commonly used in infrastructure deals—with high-leverage debt and equity structures. This approach is unsteady given speculative future AI revenue streams
Musk Doubts the Funds’ Legitimacy
Elon Musk publicly criticized the project, stating that “SoftBank has well under $10 billion secured,” contradicting the $100 billion immediate investment claim announced at the White House summit The Verge.
SoftBank’s Bigger Bet on AI
- In FY 2025, SoftBank posted its first annual profit in four years, boosting CEO Masayoshi Son’s confidence in doubling down on AI investments, including OpenAI and other ventures like Arm and Robo HD
- SoftBank has committed $40 billion in funding for OpenAI, with approximately $2.2 billion invested so far
Summary Table
| Aspect | Status / Trend |
|---|---|
| Total project target | $500 billion by 2029 |
| Firm commitments | ~$50 billion (mainly G42 and OpenAI/SoftBank) |
| Funds disbursed | ~$7.5 billion |
| Financial structure | Project financing; equity + mezzanine + senior debt |
| Challenges | Slow capital flow, investor caution, rising costs |
| Criticism | Elon Musk doubts SoftBank has required liquidity |
Why It Matters
- The Stargate initiative is billed as the largest AI infrastructure project ever, but momentum is stalling due to weak funding traction.
- Investor confidence is shaken around long timelines, uncertain revenue from AI services, and macroeconomic risks.
- A failure or slowdown in execution could reshape expectations about how large-scale AI infrastructure is funded—and who leads it next.
