OpenAI Stargate project delay explained: Elon Musk’s funding doubts resurface as SoftBank deadlock halts $500 billion AI plan

The Stargate project, unveiled in January 2025, has yet to begin development on any of its proposed data centres, according to a report. The delay is linked primarily to disagreements between OpenAI and SoftBank over key aspects of the project, raising fresh questions about execution and funding.

Stargate LLC was announced on January 21, 2025, by Donald Trump as a large-scale AI joint venture. The initiative brought together OpenAI, SoftBank, Oracle, and MGX.

The project outlined an ambitious plan, with funding projected at up to $500 billion. It aimed to build AI data centres capable of delivering 10 gigawatts of computing power. An initial $100 billion in spending was expected in the near term to accelerate development.

Despite these commitments, progress has not materialised on the ground.

The report highlights a prolonged disagreement between OpenAI and SoftBank over ownership, funding responsibilities, and construction of the Texas campus. This impasse has lasted several months.

As a result, OpenAI lost valuable construction time and its general contractor. The situation eventually led the company to pause the project after failing to proceed independently.

OpenAI, known for investing billions across its initiatives, faced difficulty outlining a clear path to profitability that could attract lenders. The earliest projected timeline for profitability was set at 2029, which further complicated financing efforts.

As of February 2026, Stargate has not commenced construction. OpenAI has also missed its target of achieving 10 gigawatts of capacity by the end of 2025.

Meanwhile, estimated spending on computing power has increased significantly, rising from $450 billion to $665 billion.

To manage growing costs, OpenAI turned to external providers such as Amazon Web Services and Google Cloud. This move contrasts with its earlier efforts to reduce reliance on such platforms and build independent infrastructure.

Elon Musk, founder of xAI, had expressed doubts about the project’s funding shortly after its announcement.

On January 22, 2025, he wrote on his platform X, “They don't actually have the money,” and added that SoftBank had less than $10 billion available.

OpenAI CEO Sam Altman responded at the time, stating that Musk “surely knew” he was incorrect and invited him to visit the first project site, which he said was already underway. He also described the initiative as beneficial for the country.

In February 2026, Musk reacted again on X to posts suggesting his earlier concerns were accurate. He wrote, “Hardware is hard,” and added in another response, “Those who have tried to do so at scale will understand.”

The Stargate project remains delayed amid unresolved disputes, rising costs, and missed targets, bringing renewed scrutiny to earlier concerns about its funding and feasibility.