SoftBank's $100b Stargate AI infrastructure plan stalls on tariffs

SoftBank Group’s Stargate project, which aims to invest US$100 billion in AI infrastructure in the United States, is experiencing delays due to economic uncertainty and tariff risks.

Announced in January 2025 by SoftBank founder Masayoshi Son and OpenAI co-founder Sam Altman, the project has yet to secure financing or start detailed discussions with banks and investors.

Preliminary talks with lenders and asset managers, including JPMorgan and Apollo Global Management, began earlier this year.

However, rising capital costs, potential overcapacity, and cheaper AI alternatives have slowed progress, according to sources familiar with the situation.

Economic risks, such as increased costs for data center components due to tariffs, are contributing to the uncertainty.

Analysts at TD Cowen project that data center costs could rise by 5% to 15% as a result of these tariffs.

SoftBank, which is overseeing Stargate’s financing, plans to fund the project through a combination of equity and debt.

The company is exploring additional data center locations alongside the initial facility in Abilene, Texas, which is being developed by Oracle and is expected to become a major AI training hub.

OpenAI, a key partner in the Stargate initiative, is also facing challenges, including public backlash over restructuring plans.

Despite these issues, SoftBank remains committed to its US$30 billion investment in OpenAI.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Tariffs reshape global tech investment strategies beyond simple cost increases

Trump’s tariff policies are forcing fundamental reassessment of major tech infrastructure investments, going well beyond simple cost increases.

The impact on SoftBank’s Stargate project demonstrates how tariffs create multilayered uncertainty, with data center costs projected to rise 5-15% through taxes on server racks, cooling systems, and chips 1.

This uncertainty has delayed what was supposed to be an “immediate” deployment of $100 billion, with SoftBank unable to finalize financing templates or secure commitments from financial partners 2.