OpenAI and SoftBank Commit $1 Billion to Stargate Affiliate SB Energy

OpenAI and SoftBank Commit $1 Billion to Data Center Expansion

Photographer: Toru Hanai/Bloomberg

OpenAI and SoftBank Group Corp. have announced a joint investment totaling $1 billion in SB Energy, an infrastructure company collaborating with leading technology firms to develop extensive data center networks across the United States to support artificial intelligence advancements.

According to a statement released on Friday, both OpenAI and SoftBank will contribute $500 million each to SB Energy, fueling the company’s growth as a major developer and operator of data centers. OpenAI also revealed that SB Energy has been chosen to construct and manage its 1.2-gigawatt data center in Milam County, Texas—a facility with enough capacity to supply electricity to approximately 750,000 American households simultaneously.

The companies have not revealed the valuation associated with this investment.

As technology giants pursue ambitious AI goals, securing reliable energy sources has become a top priority. This has sparked intense competition to obtain the power needed for increasingly large and numerous data centers, contributing to a surge in electricity demand nationwide.

To address these needs, some firms are investing directly in energy suppliers or power plants, or arranging their own dedicated energy sources. For example, Meta Platforms Inc. recently announced agreements that could ultimately provide over 6 gigawatts of nuclear energy.

SB Energy, a company with longstanding support from SoftBank, originally focused on renewable energy and storage solutions. In recent years, it has expanded into the development, ownership, and operation of data centers. This latest round of funding follows an $800 million investment last year from Ares Infrastructure Opportunities funds.

The collaboration between SoftBank and OpenAI is part of a broader trend of interconnected partnerships among technology companies, which are fueling the rapid growth of the AI sector. However, these alliances have also raised questions about potential risks if the demand for artificial intelligence does not meet expectations. Notably, SoftBank is among OpenAI’s largest backers.

This partnership builds on OpenAI’s Stargate initiative—a joint venture with partners such as SoftBank and Oracle Corp.—which aims to invest $500 billion over four years in U.S. data centers and AI infrastructure. The first Stargate site is a massive data center in Abilene, Texas, developed by Oracle in collaboration with Crusoe.

SB Energy is currently working on several large-scale data center campuses, each with multi-gigawatt capacities.

Reporting assistance by Mark Chediak.

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