OpenAI and SoftBank Invest $1 Billion in SB Energy for AI Data Center Expansion

TLDR

• OpenAI and SoftBank are investing $500 million each into SB Energy for a total $1 billion investment to support AI data center expansion
• SB Energy will build and operate OpenAI’s 1.2-gigawatt data center in Milam County, Texas announced in September 2025
• The investment is part of the $500 billion Stargate initiative announced by President Trump in January 2025
• SB Energy will become an OpenAI customer, using its APIs and deploying ChatGPT for employees
• Initial facilities from SB Energy’s multi-gigawatt data center campuses are expected to begin service in 2026

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OpenAI and SoftBank Group announced plans to invest $1 billion in SB Energy on Friday. Each company will contribute $500 million to support the expansion of data center and power infrastructure.

The investment is part of the Stargate initiative, a $500 billion multi-year project to build AI data centers. President Donald Trump backed the initiative when it was announced in January 2025.

SB Energy, owned by SoftBank and backed by Ares Management, will build and operate OpenAI’s 1.2-gigawatt data center site in Milam County, Texas. This facility was first announced in September 2025.

The partnership creates a non-exclusive preferred relationship between the companies to develop a new model for data center construction. This model combines OpenAI’s data center design expertise with SB Energy’s experience in speed, cost management, and energy delivery.

SB Energy operates energy projects across the United States with offices in Redwood City, San Diego, and Denver. The company has several multi-gigawatt data center campuses under development.

Initial facilities are currently under construction and expected to enter service in 2026. SB Energy co-CEO Rich Hossfeld said the partnership “accelerates our delivery of advanced AI data center campuses and associated energy infrastructure at the scale required to advance Stargate.”

Growing Energy Demands Drive Infrastructure Investment

Tech companies are investing directly in power infrastructure as energy access becomes a limiting factor for AI expansion. The push for larger and more numerous data centers is driving electricity demand higher across the industry.

SB Energy will also become a customer of OpenAI. The company will use OpenAI’s APIs and deploy ChatGPT for its employees.

The data center construction boom has prompted major tech companies to allocate substantial funds to infrastructure projects. These projects require massive investments in chips, power, cooling, and servers.

SoftBank and OpenAI Deepen Partnership

SoftBank and OpenAI have become closely connected over the past year. Two months after the Stargate project was announced, OpenAI closed a $40 billion financing round led by SoftBank.

This funding round was the largest private tech investment on record. Microsoft, Coatue, Altimeter, and Thrive participated in the round.

SoftBank sold its entire stake in chipmaker Nvidia for $5.83 billion in November 2025. The company said it was capitalizing on its bet on OpenAI.

OpenAI has signed more than $1.4 trillion in infrastructure deals in recent months to build the data centers needed to meet growing demand. CEO Sam Altman said in November that the company was on track to generate more than $20 billion in annualized revenue in 2025.

The ChatGPT maker is burning through cash and remains far from profitability. The company continues to rely heavily on outside capital to fund its operations and expansion plans.

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