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3mo ago

SoftBank's $500 Billion Stargate AI Project Faces Delays Amid Tariff Concerns

Initial $100 billion funding for the massive AI data center initiative remains stalled as import tariffs raise costs, even as SoftBank posts its first annual profit in four years.

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SoftBank Group has been actively investing in AI under its flamboyant founder and CEO Masayoshi Son (R)
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Overview

  • The Stargate project, led by SoftBank, OpenAI, and Oracle, aims to build up to 20 AI data centers to create the world's largest AI training facility.
  • The initial $100 billion investment has been delayed due to cost uncertainties caused by President Trump's import tariffs, which could increase expenses by 5–15%.
  • SoftBank has engaged in financing talks with major lenders like Mizuho and JPMorgan, but no deals have been finalized as investors hesitate over tariff impacts.
  • Despite delays, SoftBank reported a ¥1.15 trillion ($7.8 billion) net profit for the fiscal year, its first annual profit since 2020–21, and continues its $30 billion investment in OpenAI.
  • Site preparation for Stargate's first data center in Abilene, Texas, is ongoing, and OpenAI has abandoned its for-profit conversion plan, signaling a shift in strategy.