Openai's ambitious Stargate Data Center project is facing delays thanks to tariff-related economic uncertainty, Bloomberg reports.
With volatility in the growing market and cheaper AI services, banks, private equity investors and asset managers have been aware of investing in Stargate, an Openai-led project aimed at raising up to $500 million for AI infrastructure in the US and abroad. SoftBank, which said it would contribute significant capital to Stargate in January, has yet to develop a funding template or begin a detailed discussion with potential supporters.
Tariffs can significantly increase the cost of data center build-outs. According to an analysis by TD Cowen cited by Bloomberg, hiking the prices of server racks, cooling systems, chips and other components could contribute to an average increase in overall build costs of 5-15%.
Investors are also wary of a surge in overpowered capacity. As Bloomberg points out, tech giants, including Microsoft and Amazon, have adjusted their data center strategies.