Despite partnership tensions and scaling back of the broader $500B vision, Stargate’s Texas operations represent the most significant AI infrastructure deployment in history. The Abilene facility is operationally progressing while the broader partnership struggles, creating a complex picture of infrastructure success amid organizational dysfunction.
Current Operational Status: What’s Actually Working
Abilene Stargate I – Confirmed Operational Progress
Construction Status: OpenAI said Tuesday that construction of the Stargate I in Abilene, Texas, is underway, and that parts of the facility are already up and running
GPU Deliveries: Oracle started delivering the first Nvidia GB200 racks to the facility last month
Job Creation: Stargate I has created “thousands” of jobs, including specialized positions for electricians, equipment operators, and technicians
Physical Scale: 875-acre site (larger than NYC’s Central Park)
Current Capacity: 200 MW deployed as of January 2025 out of 1.2 GW secured
Construction Timeline Reality
Phase 1 (Current):
Buildings: Two buildings totaling 980,000 square feet
Power: Over 200 MW of power capacity
Timeline: This phase is slated to be energized in the first half of 2025
GPU Count: 16,000 Nvidia GB200 GPUs by summer 2025
Phase 2 (In Progress):
Expansion: Construction of the second phase has already begun, adding six additional buildings to the campus
Total Scale: Eight buildings encompassing approximately 4 million square feet
Power Target: Total power capacity of 1.2 GW
GPU Capacity: Each of the data center buildings is planned to run a single network fabric with up to 50,000 of NVIDIA’s GB200 NVL72s AI GPUs
Completion: This expansion is anticipated to be completed by mid-2026
Financing: The project has secured a significant financial boost with a $7.1 billion construction loan arranged by Newmark
Infrastructure Reality vs. Partnership Fiction
What’s Actually Being Built vs. What Was Promised
MetricOriginal PromiseCurrent RealityStatusTotal Investment$500B over 4 yearsAbilene-focused executionScaled BackImmediate Deployment$100B immediately~$7B construction loan secured10x SmallerPartnership StatusUnified joint venture"Stargate is not formed yet" - Oracle CEOFailedPhysical ProgressMultiple sitesAbilene operational, expandingPartially DeliveredJob Creation100,000+ jobs promised"Thousands" created in AbileneLocalized SuccessGPU DeploymentMassive scale implied16,000 → 64,000 → 400,000 pathwayOn Track Locally
The Execution Paradox
The Abilene site demonstrates that AI infrastructure can be built at unprecedented scale when partnership complexity is removed:
Direct Execution: Crusoe began construction in June 2024. The first two buildings are expected to go live in the first half of 2025
Speed Record: “We’re trying to deliver on the fastest schedule that a 100-megawatt-or-greater data center has ever been built,” Lochmiller told reporters
Operational Success: Parts of the facility are already up and running despite broader partnership failures
Financial Reality Assessment
Actual Capital Deployment
What’s Been Secured:
Construction Financing: $7.1 billion construction loan for Phase 2
Crusoe Capital: According to The Wall Street Journal, Crusoe Energy has secured $11.6 billion in new capital
Oracle Investment: Oracle had committed $7 billion in the Stargate joint venture with an additional $25 billion in capital expenditures in 2026
Power Infrastructure: $500 million expected cost for 360.5MW natural gas plant
What’s Missing:
SoftBank Uncertainty: SoftBank has yet to develop a project financing template or begin detailed discussions with banks
Partnership Funds: The broader $500B partnership remains “not formed” according to Oracle CEO
Multi-Site Expansion: Beyond Abilene, other locations remain in planning phases
Revenue Model Reality
OpenAI’s Direct Infrastructure Strategy:
Oracle Deal: $30 billion annual data centre infrastructure deal with Oracle to rent 4.5GW of data centre capacity
Primary Customer: OpenAI will operate the center and serve as its main customer
Proven Demand: ChatGPT now has 500 million weekly users, validating infrastructure demand
Technical Infrastructure Analysis
Power and Energy Strategy
Multi-Source Approach:
Grid Power: 200 MW currently deployed from grid
Natural Gas: Developers have filed permits to operate natural gas turbines at the site (360.5MW capacity)
Renewable Plans: Discussed generating power with solar and wind projects and modular nuclear reactors
Environmental Concerns: Environmental groups have criticized the Stargate Project’s energy strategy, urging a shift towards renewable energy
GPU and Compute Deployment
Staged Rollout:
Current: Oracle started delivering the first Nvidia GB200 racks to the facility last month
Summer 2025: 16,000 Nvidia GB200 GPUs operational
End 2026: 64,000 GPUs deployed
Future Capacity: Up to 400,000 GPUs possible (design capacity, not confirmed timeline)
Network Design: Each data center building will be able to operate up to 100,000 GPUs on a single integrated network fabric
Multi-State Expansion: 5-10 locations under development by 2027
Technology Breakthrough: Infrastructure advantages translate to AI capability leadership
Policy Support: Government infrastructure support accelerates expansion
Pessimistic Scenario (10% probability)
Stagnation and Competition:
Expansion Stall: Abilene remains isolated success
Customer Diversification Failure: Over-dependence on OpenAI creates vulnerability
Competitive Pressure: Other infrastructure providers capture market share
Technology Disruption: New AI architectures reduce centralized infrastructure advantages
Strategic Recommendations
For OpenAI
Accelerate Abilene Optimization: Maximize learning from current deployment
Customer Diversification: Attract additional AI companies to Abilene infrastructure
Partnership Simplification: Focus on proven bilateral relationships
Technology Integration: Leverage infrastructure advantages for AI capability development
For Infrastructure Providers
Abilene Model Replication: Study and adapt successful elements
Rural Strategy: Explore similar rural deployment opportunities
Direct Partnership Approach: Avoid mega-partnership complexity
Speed Premium: Prioritize execution velocity over comprehensive planning
For Policymakers
Successful Model Support: Provide policy support for proven approaches
Infrastructure Incentives: Create frameworks supporting AI infrastructure development
Energy Coordination: Address power availability as critical constraint
Rural Development: Leverage AI infrastructure for rural economic development
Bottom Line: Reality vs. Rhetoric
Stargate represents both a massive partnership failure and a significant infrastructure success. While the $500 billion mega-partnership vision collapsed, the Abilene facility demonstrates that world-class AI infrastructure can be built rapidly when organizational complexity is minimized.
Key Insights:
Execution Excellence: “Parts of the facility are already up and running” proves infrastructure can be built at unprecedented speed
Partnership Paradox: The mega-partnership failed while direct relationships succeeded
Scale Validation: 1.2 GW capacity with 400,000 GPU potential validates AI infrastructure demand
Model Innovation: Rural deployment with integrated power generation creates new infrastructure paradigm
The real Stargate story isn’t about partnership success or failure – it’s about proving that AI infrastructure can be built at scale when execution is prioritized over coordination. Abilene represents the future of AI infrastructure development: direct, fast, and technically excellent, even if organizationally simplified.
For the AI industry, Stargate’s lesson is clear: infrastructure success requires execution focus over partnership complexity, and rural deployment with integrated power strategies may be more viable than urban coordination-dependent approaches.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
