Analysts aren’t surprised at the news. “Big IT projects have a long history of dramatically overpromising and it appears that trend is quickly moving into the world of AI data center-based projects as well. The Stargate project, in particular, also seems to have more of a political bent to it than many other projects so that’s likely complicating matters as well,” said Bob O’Donnell, president and chief analyst with TECHnalysis Research.
“There’s little doubt we will see massive investments by many different organizations to build out AI infrastructure here in the US, but I’m not convinced that individual projects will end up mattering that much in the long run,” he added.
“I have always been skeptical about the huge number that was projected. In the hundreds of billions,” said Patrick Moorhead, CEO & chief analyst with Moor Insights & Strategy. “The only problem was that only a few billion in new funding was raised. And now there’s strife between OpenAI and SoftBank. To be fair, Oracle is part of Stargate now and OpenAI will soak up many GPUs in the Texas facility, but this was already in process when the Stargate announcement happened.”