OpenAI abandons Stargate joint venture for partner leasing model

OpenAI has effectively abandoned the original joint-venture structure behind Stargate, the $500 billion data center initiative announced by President Donald Trump in January 2025, according to the Financial Times. Instead of co-building infrastructure with Oracle and SoftBank, the company is now pursuing bilateral leasing arrangements with individual partners — a shift that has reshaped what was once hailed as one of the largest infrastructure projects in American history.

Published

Apr 29, 2026

A Joint Venture in Name Only

The Financial Times reported on April 29 that OpenAI executives now describe Stargate as merely an "umbrella" for the company's broader compute strategy, rather than a functioning joint venture. The reporting characterizes the initiative as having "shifted shape," with OpenAI moving toward one-off, large-scale deals with single partners rather than operating through the multi-party entity that included SoftBank, Oracle, and Abu Dhabi's MGX.

The pivot follows more than a year of disputes among the three founding partners over control and financing of the planned data centers, as first reported by The Information in early 2026. By March, OpenAI and Oracle confirmed they had canceled plans for an 800-megawatt expansion adjacent to the flagship Stargate campus in Abilene, Texas, citing financing challenges and changes to OpenAI's demand forecast. Microsoft subsequently stepped in to lease that capacity.

Retreating From International Projects

The domestic restructuring has been accompanied by a broader pullback from international Stargate commitments. In early April, OpenAI paused its Stargate UK project, a collaboration with cloud provider Nscale and Nvidia that aimed to deploy up to 8,000 GPUs in Northumberland, England, blaming regulation and energy costs. That facility was subsequently leased to Google.

Days later, OpenAI abandoned its planned data center in Narvik, Norway, also developed by Nscale. Microsoft took over the lease at the 230-megawatt facility, and OpenAI is now negotiating to rent capacity back from Microsoft — a move the company told CNBC was "more financially viable".

Leadership Exodus and IPO Pressures

The strategic shift has coincided with a wave of departures. Three architects of the Stargate initiative — Peter Hoeschele, Shamez Hemani, and Anuj Saharan — left to join Meta Platforms in April, according to Bloomberg. Their exits came amid a broader leadership shakeup at OpenAI that has also seen the departures of product VP Kevin Weil, Sora lead Bill Peebles, and CTO for B2B Srinivas Narayanan.

Analysts at firms including Wedbush Securities have attributed OpenAI's more disciplined infrastructure approach to preparations for a widely anticipated IPO. The company, now valued at more than $850 billion, appears to be trimming capital-intensive commitments to present cleaner finances ahead of a potential public listing.

OpenAI misses revenue and user targets ahead of IPO

OpenAI crossed $25 billion in annualized revenue by February 2026 and counts 900 million weekly ChatGPT users. But the company is projected to lose $14 billion this year and does not expect to reach profitability until at least 2029. It has committed roughly $600 billion toward computing infrastructure through 2030, down from an earlier $1.4 trillion target.