OpenAI to Build 5 New U.S. Data Centers with Tech Giants

OpenAI announced that it had signed agreements with two additional digital behemoths to construct five new data centers across the United States, just one day after accepting a $100 billion investment from the chipmaker Nvidia.

On Tuesday, the artificial intelligence startup OpenAI announced that it would collaborate with the cloud computing company Oracle and the Japanese conglomerate SoftBank to construct computing facilities in Lordstown, Ohio; Milam County, Texas; Shackelford, Texas; Doña Ana County, New Mexico; and an unidentified location in the Midwest.

The three businesses presented their plan, which included the new data centers, to President Trump at the White House in January. The firms aim to invest $500 billion in new facilities to develop artificial intelligence (AI) technologies and provide them to businesses and consumers under the Stargate Project.

OpenAI announced on Tuesday that it now had contracts in place to construct data center infrastructure worth over $400 billion. It has to make more agreements to attain its $500 billion target.

OpenAI Partners with Oracle and SoftBank for New Data Centers

Three of the additional data centers will be constructed under Oracle’s supervision and at Oracle’s expense. After that, OpenAI will buy processing power from Oracle.

According to Clay Magouyrk, co-chief executive of Oracle, the cloud computing behemoth will partially finance the construction of these facilities by exploring new financing arrangements with other partners, technology suppliers, and investors.

In addition to working with all the appropriate partners and providers to bring all of their capital to bear, he stated that it involves “interesting new corporate structures and interesting new ways of doing financing.”

According to a source familiar with the arrangement, who spoke on condition of anonymity, SoftBank plans to raise money from banks and take on debt to fund its two facilities, located in Milam County, Texas, and Ohio. OpenAI will manage construction.

The announcement is a part of a larger global initiative by tech corporations to construct data centers for artificial intelligence. By the end of the year, OpenAI, Amazon, Google, Meta, and Microsoft intend to have invested over $325 billion in these facilities.

Nvidia announced on Monday that it would invest $100 billion in OpenAI over the next few years, providing the startup with a significant boost.

Read: New YouTube AI Age Verification System in the U.S.

Massive Investments from Tech Giants to Boost AI Infrastructure

Another instance of OpenAI obtaining funding from the tech behemoths it depends on for goods and services was the Nvidia agreement. Microsoft made billions of dollars when the startup paid it for the processing power required to develop and supply artificial intelligence (AI) products, such as the chatbot ChatGPT. Microsoft invested around $13 billion in OpenAI between 2019 and 2023.

At the current $500 billion valuation of OpenAI, Nvidia has made an initial investment of $10 billion. As a result, Nvidia owns about 2% of the startup. As OpenAI and its partners continue to construct data centers, the chipmaker intends to invest an extra $10 billion in nine projects.

If artificial intelligence (AI) technologies are not embraced as rapidly as the businesses anticipate, many experts fear that firms like OpenAI may be left with massive debt. Despite earning billions of dollars, OpenAI is spending tens of billions more, primarily on processing power.

OpenAI and Oracle are already constructing a data center in Abilene, Texas, as part of the Stargate Project, and they showcased it to a group of reporters on Tuesday.

Eight data centers that use roughly 1.4 gigawatts of electricity – enough to power hundreds of thousands of homes—are to be constructed by the firms. Currently, two of these data centers are operational.

OpenAI’s Global Expansion Plans for AI Computing

Following an agreement between the Trump administration and the Persian Gulf country, OpenAI also intends to construct a computing facility in the United Arab Emirates. The Emirati artificial intelligence company G42, Oracle, SoftBank, and others are partners in the partnership that includes that data center.