OpenAI breaks from Microsoft, $40B Oracle–Nvidia Mega deal fuels US AI arms race
OpenAI is undergoing a significant transformation in its AI infrastructure strategy, moving away from its exclusive reliance on Microsoft’s Azure cloud services. This shift is marked by the ambitious $500 billion “Stargate Project,” a joint venture involving OpenAI, SoftBank, Oracle, and Abu Dhabi’s MGX fund, aiming to establish a global network of AI supercomputing facilities.
Abilene, Texas: The Flagship of Stargate
The first major endeavor under the Stargate Project is the construction of a colossal data center in Abilene, Texas. Oracle has committed approximately $40 billion to procure around 400,000 of Nvidia’s GB200 AI chips for this facility. The data center is projected to deliver 1.2 gigawatts of computing power, positioning it as a formidable competitor to other large-scale AI infrastructures like Elon Musk’s Colossus in Memphis.
The facility is being developed by Crusoe Energy Systems in partnership with Blue Owl Capital and Primary Digital Infrastructure. Together, they have formed a $3.4 billion joint venture to fund the construction of this purpose-built data center, which will be located at the Lancium Clean Campus in Abilene. The design emphasizes energy efficiency and sustainability, incorporating direct-to-chip liquid cooling and plans for renewable energy sources, including wind and potential onsite solar installations.
Global Expansion: Stargate UAE in Abu Dhabi
Expanding its global footprint, OpenAI has partnered with UAE-based technology firm G42 to develop “Stargate UAE,” a massive AI data center in Abu Dhabi. This facility is part of OpenAI’s “OpenAI for Countries” initiative and represents a significant AI investment by the UAE. The data center aims to achieve a capacity of 5 gigawatts, with the first 200 megawatts expected to be operational by the end of 2026.
The collaboration includes major technology players such as Oracle, Nvidia, Cisco, and SoftBank. Notably, the UAE has secured an agreement to import up to 500,000 AI chips annually, following the lifting of previous U.S. export restrictions. This move underscores the UAE’s ambition to become a global leader in AI infrastructure and innovation.
Strategic Partnerships and Future Outlook
The Stargate Project is a collaborative effort with SoftBank and OpenAI serving as lead partners—SoftBank providing financial backing and OpenAI overseeing operational aspects. Masayoshi Son, CEO of SoftBank, chairs the venture. Other key stakeholders include Oracle and MGX, with technology partnerships involving Nvidia, Cisco, and Microsoft.
While OpenAI is diversifying its infrastructure partnerships, it continues to collaborate with Microsoft, particularly in areas where Azure’s capabilities align with OpenAI’s needs. This strategic diversification allows OpenAI to scale its operations more effectively and tap into a broader range of technological resources.
The Stargate Project signifies a monumental step in AI infrastructure development, with the potential to reshape the global landscape of artificial intelligence. By investing in large-scale, sustainable data centers, OpenAI and its partners aim to meet the growing demand for AI capabilities and maintain a competitive edge in the rapidly evolving tech industry
