SoftBank’s ambitious attempt to collaborate with OpenAI on its massive Stargate AI supercluster project has reportedly hit a major roadblock, with Tesla and xAI CEO Elon Musk commenting that “They simply don’t have the money!” The development has raised questions about the viability of what was touted to be the world’s most powerful AI data centre project, designed to accelerate next-generation artificial general intelligence (AGI) capabilities.
What is the Stargate Project?
The Stargate Project is an AI supercomputing initiative planned by OpenAI in partnership with key technology and investment players, aimed at building one of the largest AI data centre clusters globally. The project was expected to involve an investment upwards of $100 billion over several years, involving:
- Massive data centre infrastructure with advanced cooling systems
- Tens of millions of GPUs and AI accelerators
- Close integration with energy firms to source clean and reliable power
- Enabling training of frontier AI models beyond GPT-4 and Sora
SoftBank’s Role and Current Status
SoftBank founder Masayoshi Son has been an aggressive proponent of AI investments, with his Vision Fund previously backing AI startups and semiconductor companies like ARM. According to sources, SoftBank was exploring a multi-billion-dollar investment and strategic partnership with OpenAI for Stargate, leveraging its global telecom and data centre assets.
However, financial negotiations and structuring complexities have reportedly slowed down the deal. Market analysts also cite a tighter investment climate, with SoftBank under pressure after mixed Vision Fund returns, leading to cautious capital deployment into highly capital-intensive projects.
Elon Musk’s Criticism
Elon Musk, who co-founded OpenAI in 2015 but later parted ways over governance differences, criticised the viability of Stargate, stating during an xAI townhall:
“They simply don’t have the money to build what they are proposing. Such projects need multi-layered coordination across chip supply, power infrastructure, data centres, and capital – at a scale no company has done before.”
Musk’s comments are significant as his own AI venture xAI is pursuing frontier model training while partnering with Oracle’s cloud infrastructure. He has consistently raised concerns about OpenAI’s funding, transparency, and operational efficiency in recent months.
Challenges Facing Stargate
1. Funding Scale
The projected cost of Stargate exceeds $100 billion over a decade, requiring massive capital inflows. Even with Microsoft as OpenAI’s major cloud partner, additional funding from SoftBank and other strategic investors was seen as critical.
2. Chip and GPU Supply Constraints
Global shortages of high-performance GPUs and AI accelerators have impacted cloud providers and AI labs alike. The scale envisioned for Stargate demands unprecedented chip procurement from Nvidia, AMD, and emerging custom AI chipmakers.
3. Energy and Power Requirements
The AI supercluster would require dedicated gigawatt-level clean energy sources to operate sustainably. Planning, approvals, and execution for such energy integration remain major hurdles.
4. Geopolitical and Regulatory Risks
US regulatory scrutiny over AI model development and chip export restrictions, alongside rising data sovereignty laws globally, could delay project execution timelines.
Global AI Supercluster Projects Compared
| Project | Lead Organisation(s) | Estimated Cost ($ billion) | Peak Compute Scale | Key Status Update |
|---|---|---|---|---|
| Stargate | OpenAI, SoftBank (planned) | 100+ | Millions of GPUs | Funding stalled |
| Project Olympus | Microsoft, OpenAI | 40-50 | High GPU clusters | Phase 1 operational |
| xAI Frontier Cluster | xAI, Oracle (planned) | 10-12 | ~50,000 GPUs | Ramping up |
| Nvidia AI Factories | Nvidia, cloud partners | 20-25 | Multi-region scale | Scaling globally |
SoftBank’s AI Investment Strategy
Masayoshi Son recently stated his desire to “pivot SoftBank fully into an AI company,” with investments focused on AI infrastructure, semiconductor design, and AI applications. The Vision Fund is reportedly evaluating multiple AI data centre and chip startup deals in the US, Japan, and Europe to position SoftBank as a long-term AI infrastructure enabler.
OpenAI’s Next Steps
OpenAI, backed by Microsoft’s $13 billion investment, is continuing its training of advanced models including GPT-5 and multimodal systems under CEO Sam Altman’s leadership. However, Stargate’s funding uncertainty may require:
- Strategic capital partnerships with sovereign funds and major private equity firms
- Incremental deployment instead of mega-scale buildouts
- Accelerated monetisation of ChatGPT and enterprise offerings to fund future infrastructure
An AI industry analyst said:
“While Stargate’s vision is extraordinary, the path to building it is far more complex financially, technically, and geopolitically than current public narratives suggest.”
Market Impact
OpenAI’s infrastructure constraints could influence the pace of frontier AI model releases over the coming years, with competitors like Google DeepMind, Anthropic, xAI, and Mistral AI racing to close capability gaps. Nvidia, AMD, and AI chip startups will continue to benefit from the global arms race for AI compute.
Elon Musk vs OpenAI: Renewed Tensions
Musk’s latest comments add to his growing public criticism of OpenAI’s business model, including:
- Legal action against OpenAI for alleged deviation from its founding non-profit mission
- Critique of its closed approach to model development
- Positioning xAI as a more “truthful and transparent” alternative
Conclusion
The SoftBank–OpenAI Stargate project’s roadblock reflects the enormous financial, technological, and operational challenges of building trillion-parameter scale AI infrastructure. Whether SoftBank will proceed with full-scale investment, restructure its commitment, or redirect capital towards alternative AI ventures remains to be seen.
Elon Musk’s assertion that “They simply don’t have the money” underscores the reality that AI’s next leap will not only be defined by innovation, but also by who can mobilise capital, chips, power, and geopolitical leverage to build the future of general-purpose AI.
Disclaimer
This news content is for informational purposes only. It is not intended as investment advice. Readers are advised to consult financial experts before making any business or investment decisions based on this report.
