SoftBank, OpenAI’s $100B investment delayed due to tariffs: report

New York Post - May 12th, 2025

SoftBank and OpenAI's ambitious $100 billion investment in US AI infrastructure, known as the Stargate project, faces significant delays due to concerns over potential cost increases from President Trump's tariffs. The project, initially announced during a White House briefing, aims to build up to 20 massive data centers across the US. However, fears of escalating costs have deterred investors, and no deals have been finalized despite early talks with major financial players like JPMorgan and Apollo Global Management. The tariffs could potentially increase data center construction costs by 5% to 15%, according to analysis from TD Cowen.

The significance of the Stargate project is underscored by its promise to revolutionize AI training facilities in the US, with the first site in Abilene, Texas, poised to become the world's largest AI training center. Despite the setbacks, progress continues, albeit slowly. Meanwhile, OpenAI is embroiled in separate controversies, including legal threats from co-founder Elon Musk, who opposes the company's restructuring into a for-profit entity. Altman rejected Musk's unsolicited takeover offer, further complicating the narrative around OpenAI's strategic direction. The delay and financial challenges highlight the complexities of large-scale AI infrastructure investments and the geopolitical implications of tariff policies.

Donald Trump Elon Musk Open Ai Tariffs Sam Altman Data Centers Masayoshi Son Ai Infrastructure Soft Bank Stargate Project

Story submitted by Fairstory

RATING

6.0

Moderately Fair

Read with skepticism

The news story provides a timely and relevant overview of the challenges faced by SoftBank and OpenAI in their ambitious Stargate project. It covers key issues such as investment delays due to tariffs and economic uncertainty, as well as internal challenges within OpenAI. However, the article's overall quality is hampered by a lack of direct quotes, limited viewpoints, and insufficient in-depth analysis of the broader implications. While the story is clear and accessible, it would benefit from greater transparency and a more balanced representation of perspectives. Despite these limitations, the article remains a valuable resource for understanding the current state of the Stargate project and its potential impact on the AI industry and the U.S. economy.

Accuracy

The story makes several factual claims about SoftBank and OpenAI's investment plans, delays due to tariffs, and related financial negotiations. It accurately reports the involvement of key figures like Masayoshi Son and Sam Altman, and the economic factors impacting the project, such as tariffs potentially increasing costs by 5% to 15%. However, specific details such as the exact timeline for the $100 billion investment and the status of negotiations with lenders require further verification. The mention of Elon Musk's legal challenges and the restructuring of OpenAI also aligns with known public disputes, though the specific financial figures and outcomes need confirmation.

Balance

The article presents the perspective of the challenges faced by SoftBank and OpenAI due to tariffs and economic conditions. However, it lacks a balanced view by not providing insights from the U.S. government or other stakeholders involved, such as the lenders or alternative asset managers. The focus is primarily on the difficulties and delays, without exploring potential solutions or differing opinions on the project's viability.

Clarity

The article is generally clear in its language and structure, outlining the main issues and key players involved in the Stargate project. However, some sections could benefit from more detailed explanations, particularly regarding the impact of tariffs and the specific legal challenges faced by OpenAI. The narrative flows logically, but the lack of depth in certain areas may leave readers with unanswered questions.

Source quality

The article cites Bloomberg and TD Cowen analysis, which are credible sources. However, it lacks direct quotes or statements from primary stakeholders like SoftBank, OpenAI, or the U.S. government, as they did not respond to requests for comment. The reliance on unnamed sources familiar with the matter weakens the overall reliability, as the information is not directly attributed to verifiable individuals.

Transparency

The article does not provide sufficient context regarding the methodology behind the claims, such as how the cost increase estimates were calculated or the specific nature of the legal challenges OpenAI faces. While it mentions the sources of some information, the lack of direct quotes or detailed explanations of the underlying data diminishes transparency.