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OpenAI Unveils Plan to Keep Data-Center Energy Costs in Check

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OpenAI has announced a new Stargate Community plan designed to ensure its expanding data center operations do not push up electricity costs for local communities. The initiative aims to make OpenAI’s large-scale AI infrastructure “pay its way on energy” as demand for computing power accelerates.

Stargate is a $500 billion, multi-year effort to build advanced AI data centers for training and inference, backed by investors including Oracle. The project received public support from U.S. President Donald Trump when it was first announced in early 2025.

Under the new approach, each Stargate site will have a locally tailored community plan shaped by local input and concerns. Depending on the location, OpenAI said this could involve fully funding dedicated power and storage, or paying for new energy generation and transmission capacity to support the facility.

The move reflects growing pressure on technology companies to address the strain that AI data centers place on power grids. OpenAI’s announcement follows a similar step by Microsoft, which recently outlined measures to manage water and electricity use at its U.S. data centers while working with utilities to expand local supply.

OpenAI and SoftBank Invest $1 Billion in SB Energy to Expand Stargate Data Center Buildout

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OpenAI and SoftBank Group will jointly invest $1 billion in SB Energy, committing $500 million each to accelerate the expansion of data center and power infrastructure for their Stargate initiative, SB Energy said on Friday.

SB Energy, which is owned by SoftBank, will build and operate OpenAI’s previously announced 1.2-gigawatt data center campus in Milam County, Texas. The facility is a key component of Stargate, a massive, multi-year plan to scale artificial intelligence training and inference capacity in the United States.

As part of the partnership, SB Energy will also become a customer of OpenAI, using its application programming interfaces and deploying ChatGPT internally for employees.

Stargate is a $500 billion initiative backed by major investors including Oracle, and was publicly endorsed by Donald Trump when the plan was unveiled in January 2025. The project reflects the scale at which leading AI developers are now operating as they race to secure computing power.

The deal highlights a broader industry shift in which technology companies are investing directly in energy and power infrastructure. Access to reliable electricity has become a critical bottleneck for AI expansion, as larger and more numerous data centers sharply increase power demand.

SB Energy said it is developing several data center campuses, with initial facilities expected to begin service later this year. “The partnership accelerates our delivery of advanced AI data center campuses and associated energy infrastructure at the scale required to advance Stargate and secure America’s AI future,” said SB Energy co-CEO Rich Hossfeld.

The data center construction boom has also driven rivals to commit unprecedented sums to infrastructure. Meta Platforms and other Big Tech firms have announced multi-billion-dollar investments spanning chips, cooling systems, servers and power generation.

At the same time, OpenAI is facing rapidly rising costs to train and operate its AI models amid intensifying competition from Alphabet’s Google. OpenAI CEO Sam Altman told employees late last year that the company had entered a “code red” phase, prioritising improvements to ChatGPT while delaying other product launches to counter Google’s Gemini gaining traction.

Musk’s xAI buys third building to expand AI compute power

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xAI, the artificial intelligence company founded by Elon Musk, has acquired a third building as part of its effort to significantly expand computing capacity, Musk said on Tuesday. The move is aimed at boosting xAI’s training infrastructure to nearly 2 gigawatts of compute power.

The expansion highlights xAI’s ambition to compete more aggressively with leading AI developers such as OpenAI, which develops ChatGPT, and Anthropic, creator of the Claude chatbot. xAI’s main supercomputer cluster, known as Colossus and located in Memphis, Tennessee, has been described by Musk as the largest in the world.

“xAI has bought a third building called MACROHARDRR,” Musk wrote on X, without revealing the site’s exact location. The name appears to be a play on Microsoft, a major investor in OpenAI.

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The Information, which reported the development earlier citing property records and a person familiar with the matter, said the new building is intended to support a third large-scale data centre planned outside Memphis.

According to the report, xAI plans to expand Colossus to house at least 1 million graphics processing units (GPUs). The company is expected to begin converting the newly acquired warehouse into a data centre in 2026. Both the planned facility and a separate expansion known as Colossus 2 are located near a natural gas power plant that xAI is building, alongside access to other power sources.

The rapid build-out of AI infrastructure has drawn criticism from environmental groups, who warn that large data centres consume vast amounts of energy and place strain on local power grids.