OpenAI and SoftBank invest $1B in SB Energy to scale AI data centers
OpenAI and SoftBank will invest $1 billion in SB Energy to accelerate the buildout of AI infrastructure. The move slots into the $500 billion "Stargate" commitment that OpenAI, SoftBank, and Oracle announced last January at the White House.
As part of the agreement, SB Energy will build and operate OpenAI's 1.2 gigawatt data center site in Milam County, Texas. Several multi-gigawatt campuses are in development, with initial facilities already under construction and expected to enter service this year.
Why it matters
OpenAI needs far more compute to meet demand. The company has signed more than $1.4 trillion in infrastructure deals in recent months and remains dependent on outside capital while it scales.
SoftBank's ties to OpenAI have tightened. Two months after the Stargate announcement, OpenAI closed a $40 billion financing round led by SoftBank, with participation from Microsoft, Coatue, Altimeter, and Thrive. SoftBank also sold its entire Nvidia stake for $5.83 billion as it leans into its AI bet.
OpenAI CEO Sam Altman has said the company is tracking to more than $20 billion in annualized revenue run rate in 2025, with an ambition to reach hundreds of billions by 2030.
What the buildout includes
- 1.2 GW data center in Texas: SB Energy will develop and operate the Milam County site announced in September.
- Multi-campus plan: Several large campuses are in progress, with first sites entering service this year.
- Preferred partnership: SB Energy has a non-exclusive preferred partnership with OpenAI and SoftBank to develop a new approach to data center builds.
- Model for delivery: OpenAI's first-party data center design combined with SB Energy's speed, cost discipline, and integrated energy delivery.
Who is SB Energy
SB Energy is backed by SoftBank and Ares Management. The company develops, owns, and operates energy projects across the U.S., with offices in Redwood City, San Diego, and Denver.
What leaders are saying
"Partnering with SB Energy brings together their strength in data center infrastructure and energy development and OpenAI's deep domain expertise in data center engineering," said Greg Brockman, OpenAI's president. "The result is a fast, reliable way to scale compute through large, highly optimized AI data centers."
What this means for you
- Finance: Expect sustained mega-capex cycles, complex project finance, and more JV structures. Watch credit markets tied to energy-backed data center projects and long-term offtake commitments.
- IT and Development: More compute capacity is coming online, which can reduce queue times and broaden access to larger training and inference clusters. Start planning for workloads that assume bigger context windows, larger batch sizes, and tighter integration with energy-aware scheduling.
- General business: AI services may see steadier supply and more predictable pricing as capacity ramps. Revisit 2025-2027 procurement plans and vendor strategies with data center location and latency in mind.
Timeline and next steps
- Initial facilities are under construction now and expected to enter service this year.
- Milam County's 1.2 GW site anchors the near-term expansion.
- The preferred, non-exclusive partnership sets the template for additional campuses under the broader Stargate commitment announced a year ago.
Context on the players
- OpenAI: Scaling infrastructure to support product demand and long-term research goals.
- SoftBank: Consolidating its AI strategy through direct investment, strategic exits, and partnerships.
- Ares-backed SB Energy: Focused on integrated energy and data center delivery at utility scale.
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