SoftBank and OpenAI's 70 trillion yen investment project 'Stargate' is stalled due to Trump tariffs and unable to reach an agreement with lenders



On January 22, 2025, SoftBank Group announced the

Stargate Project (Stargate), a project to invest $500 billion (approximately 74 trillion yen) over four years in building OpenAI's AI infrastructure. However, it has been reported that the project has stalled due to the impact of tariff policies announced by President Donald Trump.

SoftBank Stargate Venture With OpenAI Snags on Tariff Fears - Bloomberg
https://www.bloomberg.com/news/articles/2025-05-12/softbank-stargate-venture-with-openai-hits-snags-on-tariff-fears

Stargate is an investment project to build OpenAI's AI infrastructure, with a planned investment of $500 billion (approximately 74 trillion yen) over four years from 2025. The initial investors are SoftBank Group, OpenAI, Oracle, and MGX, with Arm, Microsoft, NVIDIA, Oracle, and OpenAI participating as early major technology partners. The first press conference for Stargate was held at the White House, and was attended by President Trump, SoftBank Group CEO Masayoshi Son, OpenAI CEO Sam Altman, and Oracle co-founder Larry Ellison.

OpenAI and SoftBank announce 'Stargate' project to establish AI data center with investment of over 70 trillion yen - GIGAZINE



At the time of Stargate's announcement, SoftBank Group and OpenAI stated that they planned to 'immediately begin investing $100 billion (approximately 15 trillion yen)' of the planned investment amount. However, at the time of writing, more than three months after the announcement, SoftBank Group has not yet formulated a fundraising template for Stargate, and has not yet begun detailed discussions with banks and investors.



According to Bloomberg, preliminary discussions with Mizuho Bank, JP Morgan, Apollo Global Management, and Brookfield Asset Management to execute Stargate have begun in early 2025. However, the talks have stalled due to lenders and bond investors shying away from high-risk investments due to the impact of Trump tariffs, as well as the risk that a global economic downturn will put a strain on data center demand.

Analysts estimate that the Trump tariffs will increase the prices of products essential to building AI infrastructure, such as server racks, cooling systems, and semiconductors, raising the cost of building data centers by 5 to 15 percent.

However, there is some optimism about Stargate, with Richard Kaye, co-lead manager of Japan equity strategy at Comgest Asset Management, estimating that 'after investing $50 billion in Stargate, SoftBank can recoup all of its costs within five to six years and expect to realize an estimated profit of 15 to 20 percent.'

In addition, CEO Altman posted a photo of a data center under construction in Abilene, Texas on May 8, 2025, highlighting Stargate's achievements.




Related Posts:

in Note, Posted by log1o_hf