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technology2h ago
OpenAI has effectively abandoned first-party Stargate data centers in favor of more flexible deals — company now prefers to lease compute and says Stargate is an umbrella term
- OpenAI abandoned first-party Stargate data centers in practice, shifting to long-term capacity leases via third parties.
- Stargate is described as an umbrella for OpenAI’s compute strategy, not a fixed in-house data center network.
- Partnership tensions over who would control data centers contributed to the shift away from a joint-owned model.
- Oracle and SoftBank were involved partners; SoftBank would own a Texas data center while OpenAI would lease and operate others.
- The Financial Times report indicates OpenAI is prioritizing bilateral deals with Oracle and others over a joint venture.
- Analysts warn OpenAI could run out of cash mid-2027 given the scale of compute investment and funding gaps.
- Microsoft has stepped in on some Stargate projects where OpenAI pulled back, signaling a shift in tenancy and support.
- OpenAI has not posted a profit since its 2015 founding, despite securing large funding rounds.
- UK and Narvik Stargate projects faced hold placements, with funding and regulatory challenges cited.
- Industry observers note the core difference between startups and big tech is cash flow and access to external funding.
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