By Gage Skidmore from Surprise
On Tuesday, President Donald Trump highlighted a significant joint venture aimed at investing up to $500 billion in infrastructure related to artificial intelligence, established through a collaboration between OpenAI, Oracle, and SoftBank. The newly formed entity, named Stargate, is set to develop data centers and the necessary electricity generation to support the rapid advancement of AI technology in Texas, as reported by the White House.
The initial funding is projected at $100 billion, with the potential to increase to five times that amount. “It’s substantial investment and top-tier talent,” Trump commented, emphasizing that this initiative represents “a strong affirmation of confidence in America’s capabilities” under his administration. Present at the White House alongside Trump, who had just been inaugurated, were Masayoshi Son of SoftBank, Sam Altman of OpenAI, and Larry Ellison of Oracle. The trio acknowledged Trump’s role in facilitating the project, despite construction having commenced earlier, with plans dating back to 2024.
“This project is poised to be the defining initiative of our time,” stated Altman, the CEO of OpenAI. Ellison mentioned that construction is already underway for the data centers, with ten currently in progress. The Oracle chairman indicated that this initiative is linked to digital health records and could facilitate the treatment of diseases like cancer through the potential development of personalized vaccines.
Son commented, “We are entering a golden age,” alluding to Trump’s assertion that the US would experience a “golden age” with his return to the White House.
The billionaire investor from Japan had already pledged in December to allocate $100 billion towards US projects over the next four years. This follows his earlier commitment of $50 billion in investments prior to Trump’s first term, which encompassed a significant investment in the struggling office-sharing firm WeWork.
Trump has taken advantage of similar declarations to assert that his presidency is fostering economic growth. Nonetheless, there were already expectations for a considerable expansion of data centers and energy plants required for AI development. While AI offers the potential to increase productivity through automation, it also presents the risk of job displacement if not managed properly.
The origins of the Stargate initiative trace back to the Biden administration. The tech news outlet The Information first disclosed details about the project in March 2024. OpenAI has traditionally depended on Microsoft’s data centers for its AI infrastructure, but it has shown a growing interest in establishing its own facilities.
In a letter to the Commerce Department under the Biden administration last fall, OpenAI noted that the planning and permitting processes for such developments “can be lengthy and complex, particularly for energy infrastructure.”
Additional collaborators on the project include Microsoft, investor MGX, and chip manufacturers Arm and NVIDIA, as indicated by separate announcements from Oracle and OpenAI.
The initiative to construct data centers began before the Trump administration. In October, the financial firm Blackstone projected that the US would witness $1 trillion in data center investments over the next five years, with an additional $1 trillion pledged globally.
The investment forecasts indicate that a significant portion of the new capital is expected to flow through Stargate, as OpenAI has positioned itself as a leader in the industry following the 2022 introduction of ChatGPT. This chatbot has captured public interest with its capability to address intriguing inquiries and execute fundamental business functions.
The White House is prioritizing the facilitation of new electricity generation in light of the anticipated growth of AI, recognizing that the United States is in a competitive race with China to advance a technology that is increasingly being embraced by enterprises.
However, the regulatory landscape for AI remains somewhat ambiguous, as former President Trump recently rescinded the 2023 directive established by President Biden, which aimed to implement safety standards and watermarking for AI-generated content, among other objectives, in an effort to mitigate potential risks to national security and economic stability.
Elon Musk, a supporter of Trump and valued at over $400 billion, was an initial investor in OpenAI. However, he has since expressed concerns regarding its transition to a for-profit model and has launched his own AI venture, xAI. Additionally, Musk has been appointed to lead the newly established “Department of Government Efficiency,” which was formally announced by Trump on Monday, aimed at curbing government spending.
