President Donald Trump announced on Tuesday a collaborative initiative aimed at funneling up to $500 billion into infrastructure focused on artificial intelligence (AI), part of a new partnership involving OpenAI, Oracle, and SoftBank. The venture, dubbed Stargate, is set to develop data centers and the essential electricity generation infrastructure in Texas to support the burgeoning AI landscape, as stated by the White House. The initial phase of investment is anticipated to be around $100 billion, with the potential to escalate to five times that amount.
Trump emphasized the significance of the investment, highlighting the caliber of individuals involved, and described it as “a resounding declaration of confidence in America’s potential” under his administration. Among those joining the President at the announcement were Masayoshi Son from SoftBank, Sam Altman from OpenAI, and Larry Ellison from Oracle. They all acknowledged Trump’s role in facilitating the project, although blueprints for the venture date back to 2024 and some construction has already commenced.
Altman, the CEO of OpenAI, stated his belief that this undertaking would represent “the most important project of this era.” Ellison added that the foundation for the data centers has begun, mentioning the construction of ten centers thus far. He indicated that the initiative is also linked to digital health records, which could potentially enhance treatment options for diseases like cancer by paving the way for tailored vaccines.
Son, a Japanese billionaire, referred to Trump’s assertion of ushering in a “golden age” for the U.S., expressing optimism about the project’s prospects. Furthermore, last December, Son had pledged to invest $100 billion in U.S.-based initiatives over four years, previously committing $50 billion before Trump’s initial term, which included investments in the troubled firm WeWork.
While Trump has leveraged similar projects to underscore a boost in the economy, there are already strong expectations for significant investments in data centers and power plants necessary for AI advancements. This technology is expected to enhance productivity through automation but also carries the potential risk of job displacement if not managed properly.
Plans for Stargate reportedly trace back to the Biden administration, with tech news outlets initially revealing details about the project in March 2024. OpenAI has historically depended on Microsoft’s data centers for its AI operations but is showing growing interest in establishing its own facilities. In correspondence to the Biden administration’s Commerce Department last fall, OpenAI highlighted that the planning and permitting processes for such developments “can be lengthy and complex, particularly for energy infrastructure.”
Additional key players in the Stargate initiative include Microsoft, investor MGX, and chip manufacturers Arm and NVIDIA, as reported by Oracle and OpenAI. The drive to construct new data centers existed prior to Trump’s presidency; for example, last October, financial firm Blackstone projected a $1 trillion commitment to U.S. data centers over five years, with an equal amount expected globally.
This anticipated influx of capital is likely to be funneled through Stargate, building on OpenAI’s status as an industry leader after the successful launch of ChatGPT in 2022—a chatbot that captured public interest with its ability to address complex inquiries and perform various business functions. The White House has been proactive in streamlining the development of new electricity generation, recognizing the competitive race with China to lead in impactful technology.
Nevertheless, the future regulatory landscape for AI remains somewhat elusive, especially after Trump rescinded a 2023 executive order by former President Biden that aimed to implement safety standards and establish watermarking for AI-generated content, among other objectives, intended to mitigate potential risks associated with the technology.
Elon Musk, a Trump ally and early investor in OpenAI, has since voiced concerns over its transition to a for-profit model and has formed his own AI venture, xAI. He is also leading the newly established “Department of Government Efficiency,” with the aim of promoting reduced government expenditures.
Additionally, in January, Trump had announced a $20 billion investment from DAMAC Properties aimed at creating AI-related data centers in the United Arab Emirates.
