OpenAI and SoftBank invest $1 billion in SB Energy as Stargate expands business

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January 9 (Reuters) – OpenAI and SoftBank Group (9984.T)opens a new tab SB Energy announced that it will invest $500 million each in SB Energy to expand data center and power infrastructure for the Stargate initiative.

SB Energy, a SoftBank-owned company, will build and operate OpenAI's previously announced 1.2 gigawatt data center site in Milam County, Texas.

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SB Energy will also become an OpenAI customer and use its API to deploy ChatGPT for its employees.

Stargate is a $500 billion, multi-year effort to build AI data centers for training and inference, backed by major investors including Oracle. President Donald Trump supported the initiative when the companies announced the plan in January 2025.

With energy access becoming a critical constraint in expanding AI, tech companies are investing directly in power infrastructure, and data centers are getting bigger and more numerous, increasing power demand.

SB Energy is developing multiple data center campuses, with initial facilities expected to begin service this year.

SB Energy co-CEO Rich Hossfeld said the partnership will “accelerate the delivery of advanced AI data center campuses and associated energy infrastructure at the scale needed to advance Stargate and secure America's AI future.”

The data center construction boom is prompting major companies such as Meta Platforms (META.O) to enter the market.opens a new tab Allocating unprecedented amounts of money to infrastructure projects that require huge investments in chips, power, cooling, and servers.
Meanwhile, OpenAI faces rising costs to train and operate its AI systems as competition from Alphabet (GOOGL.O) intensifies.opens a new tab Google.

CEO Sam Altman told staff late last year that the company had entered “code red” mode focused on strengthening ChatGPT while delaying other product launches to counter Gemini's growing momentum.

Reporting by Deborah Sophia and Harshita Mary Varghese in Bangalore. Editing: Tasim Zahid

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