OpenAI’s Stargate is probably still on the launch pad in this contest of artificial intelligence development. It’s easy to imagine wormholes of the futuristic variety conjured up by a project name like this, with boundless compute, but it turns out that good old Earthly problems, such things as tariffs, inflation, and banks which aren’t quite ready to fly, are proving harder to navigate than time or space.

According to reports, OpenAI’s “Stargate” data center project, the one that is grandly envisaged to become a massive build-up of an ecosystem for AI infrastructures across the United States and abroad, has hit turbulence. The project has not been very fortunate in attracting investment because of the current uncertain state of the economy and changed sentiment in the industry.

Delayed For Now

Originally announced earlier this year, the Stargate program sought to raise as much as $500 million to support OpenAI-driven data centers, an important step towards staying ahead of skyrocketing demand for compute-intensive AI models. Key backers, such as SoftBank, had indicated a desire to fund the effort. However, according to the reports, SoftBank has yet to seal a financing deal or start formal negotiations with co-investors.

Surging tariffs on technology gear seem to be making things more difficult. A TD Cowen study, quoted in the reports, estimates that higher import costs for data center hardware, such as server racks, chips, and cooling systems, will increase buildout costs by 5% to 15% on average.

AI Infrastructure

Adding to the worry is a rising chorus of alarm that the AI infrastructure race might be getting too hot to handle. Microsoft, Amazon, and other technology giants have been reported to have reassessed or shelved some of their own data center expansion plans due to possible over-capacity. OpenAI is now actively attempting to scale its backend to accommodate features such as ChatGPT and API services. However, as market dynamics have changed and AI services have fallen in price, investors are looking more carefully before making long-term infrastructure bets.

Danger Ahead

The delay on Stargate is not necessarily a failure but it highlights how changes in geopolitics and macroeconomics, tariffs specifically, are starting to make their mark on the future of AI. Not only through regulation, but even through sheer cost of infrastructure they have stained the future of AI. While OpenAI expands in the global landscape, Stargate’s destiny might become dependent less on technological innovation and more on inflation. All of this serves as a stark reminder that while OpenAI’s dream of building out Stargate-level infrastructure is still alive and kicking, even the most advanced AI endeavors don’t live in a bubble due to financial and geopolitical headwinds.