OpenAI Pausing Stargate Projects In 3 Countries As Key Execs Depart

OpenAI is abandoning plans for its Stargate data center in Norway, a decision that comes on the heels of the company pausing its UK Stargate project and withdrawing from an expansion of the initiative’s flagship campus in Texas.

Also during the last week, reports emerged that three executives with key roles in Stargate are departing, signaling potential turbulence for the maker of ChatGPT ahead of its much-anticipated initial public offering.

The campus being developed by AI data center specialist Nscale in the Arctic Norwegian city of Narvik was intended to be part of Stargate, OpenAI’s global build-out of data centers and other artificial intelligence infrastructure.

Although no deal had been formalized, OpenAI listed the project on its website as Stargate Norway, and as recently as July, CEO Sam Altman had highlighted the site as the vanguard for Stargate’s expansion into Europe.

“I’ve always said we’d love to bring Stargate to Europe if the conditions are right, and we think we’ve found that in Narvik,” Altman said at the time. 

Now, the Narvik site is being leased to Microsoft instead, Bloomberg reports. And it isn’t the only data center project initially touted as part of Stargate that OpenAI has stepped away from in recent weeks. 

OpenAI announced last week that it was pausing a Stargate project in the UK just six months after unveiling it, a decision the firm attributed to “regulation and the cost of energy.” The West London site, which is also developed by Nscale, will now be leased to Google. 

Last month, OpenAI and Oracle confirmed they had canceled plans for an 800-megawatt expansion of the flagship Stargate data center campus in Abilene, Texas, due to financing challenges and changes to OpenAI’s demand forecast. As in Norway, Microsoft has since stepped in to lease that planned capacity. 

The canceled projects amount to something of a slowdown — at least for the time being — from what had been OpenAI’s foot-on-the-gas approach to infrastructure expansion through Stargate. 

Unveiled alongside President Donald Trump in the White House and originally pitched as a $500B investment in building 10 gigawatts of AI data centers across the U.S., the initiative is led by OpenAI, Oracle and SoftBank. A range of major tech and investment players are also involved, including Emirati sovereign wealth fund MGX and chipmaker Nvidia.

Although Stargate was initially presented as a specific development joint venture, over time, the principals have begun using the moniker to refer to a range of deals to expand OpenAI’s access to computing capacity. 

Only one Stargate data center is even partially in operation today: the initiative’s flagship site in Abilene. But more campuses are in various stages of planning or development in Ann Arbor, Michigan, Lordstown, Ohio, Doña Ana County, New Mexico, Texas’ Shackelford and Milam counties, and the United Arab Emirates. The projects are being co-developed with a range of data center firms, including Vantage Data Centers and Related Digital. 

OpenAI has been expanding its digital infrastructure footprint at a breakneck pace, roughly tripling its total computing power annually since 2023. The company told investors in February it plans to spend close to $600B on AI infrastructure by 2030. 

But the massive price tag of OpenAI’s infrastructure build-out is also proving to be a cause of concern for investors ahead of the firm’s planned IPO, expected to take place by early 2027. OpenAI plans to spend $121B on new computing infrastructure in 2028, spending that would exceed expected revenue by $85B, The Wall Street Journal reported.

Such losses would be the highest of any public company in history. 

With these concerns in mind, OpenAI’s leadership has told investors in recent weeks that it plans to temper spending from its more aggressive earlier projections. This shift has coincided with the withdrawal from some of the firm’s high-profile data center development projects. 

“OpenAI has come to the realization that the market doesn’t necessarily appreciate the reckless approach to growth and spending,” Futurum Group CEO Daniel Newman told CNBC last month. 

It is hardly unheard of for major tech firms to pause or eliminate planned data center projects, even amid periods of rapid expansion. Microsoft and Amazon triggered Wall Street fears of data center oversupply a year ago when the two companies canceled or delayed certain projects, only to crank up data center spending to record levels in the weeks that followed. 

But OpenAI’s development drawdowns have also coincided with an exodus of top talent connected to Stargate.

Three key leaders of the Stargate initiative are leaving the firm to join Meta, The Information reported. The trio includes Peter Hoeschele, an executive who played a central role in launching Stargate, and Shamez Hemani, OpenAI’s head of infrastructure strategy and finance.

OpenAI didn't respond to Bisnow's request for comment.