Oracle stock falls amid Stargate project concerns

Investing.com -- Oracle Corporation (NYSE: ORCL) shares fell 4.7% Monday amid broader tech sector weakness and following a report from The Information raising questions about the Stargate AI data center initiative.

The Nasdaq 100 declined 1% during the session, contributing to pressure on tech stocks. Oracle is one of three partners in Stargate, a $500 billion-plus joint venture with OpenAI and SoftBank announced in January 2025.

According to The Information’s weekend report, the Stargate joint venture has minimal staff and does not directly control any data centers. The report claims that in the weeks following the announcement, the three partners disagreed over project structure and responsibilities.

The report states that OpenAI initially attempted to develop data centers itself but shelved those plans after lenders balked at backing multibillion-dollar projects tied to the company’s unproven business model. OpenAI subsequently structured separate deals with SoftBank and Oracle rather than working through the joint venture.

In July, Oracle and OpenAI announced a deal to develop 4.5 gigawatts of data center capacity across multiple U.S. sites. The companies agreed to share economic risk, meaning delays or budget overruns would be split between them, according to the report.

A separate project in Milam County, Texas, involves OpenAI and SoftBank Energy, with SoftBank developing and owning the facility while OpenAI controls its design and holds the long-term lease. The companies broke ground on that project in October.

The Information reported that OpenAI’s struggles to secure computing capacity weighed on its finances last year, with gross profit margins lower than expected due to last-minute compute purchases.

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