The Stargate data center project, an ambitious venture by OpenAI, is experiencing delays due to economic uncertainty caused by tariff-related issues, as reported by TechCrunch and further elaborated on by Bloomberg.

The increasing market volatility, combined with the availability of more affordable AI services, has led to a decrease in investor confidence, with banks, private equity investors, and asset managers becoming cautious about investing in Stargate. This project, led by OpenAI, aims to secure up to $500 million in funding for AI infrastructure development in the U.S. and internationally. Despite SoftBank’s initial commitment in January to provide significant capital, the company has yet to establish a financing plan or engage in detailed discussions with potential investors, according to Bloomberg.

A significant concern is the potential impact of tariffs on the cost of building data centers. An analysis by TD Cowen, cited by Bloomberg, suggests that increased prices for essential components such as server racks, cooling systems, and chips could result in an average build cost increase of 5-15%.

Additionally, investors are becoming increasingly wary of the risk of overcapacity in the data center market. As noted by Bloomberg, tech giants like Microsoft and Amazon have adjusted their data center strategies, in some cases by scaling back construction projects, further contributing to investor concerns.