Tech giants are putting $500bn into ‘Stargate’ to build up AI in US
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US President Donald Trump, from left, Larry Ellison, co-founder and executive chairman of Oracle Corp., Masayoshi Son, chief executive officer of SoftBank Group Corp., and Sam Altman, chief executive officer of OpenAI Inc., in the Roosevelt Room of the White House in Washington, DC, US, on Tuesday, Jan. 21, 2025. Trump announced a joint venture to fund artificial intelligence infrastructure worth billions of dollars with the leaders of Softbank Group Corp., OpenAI LLC, and Oracle Corp., an effort aimed at speeding development of the emerging technology. Photographer: Aaron Schwartz/Sipa/Bloomberg via Getty Images
Tech giants are investing $500 billion in AI infrastructure through a new venture called The Stargate Project, a major collaboration between OpenAI, Oracle, Japan’s SoftBank, and the UAE’s MGX investment arm. Announced at the White House by President Donald Trump, the initiative aims to strengthen the US’s dominance in artificial intelligence (AI) and its infrastructure.
The project was heralded by Trump as “the largest AI infrastructure project by far in history,” which he claimed would secure the future of AI technology in the United States. However, Elon Musk, a prominent tech figure and a critic of OpenAI CEO Sam Altman, quickly raised doubts about the venture’s financial backing. Musk, a key advisor to Trump, claimed the venture lacked the necessary funds and suggested SoftBank’s contribution was significantly less than claimed. According to Musk, SoftBank had “well under $10 billion” secured for the project, although he didn’t provide concrete details to back his assertion.
Altman, in response, dismissed Musk’s claims, insisting that the project was fully funded and operational, with $100 billion available immediately for development. The Stargate Project’s goal is to construct AI-focused data centers across the US, starting with a facility in Texas, and creating an estimated 100,000 jobs. Despite Musk’s doubts, a source close to the project emphasized that the necessary capital was in place and that Musk’s information was inaccurate.
The collaboration between these tech giants comes amid a surge in AI investments. The demand for AI infrastructure is rapidly increasing, driven by the growing need for more data centers. However, this demand has raised concerns about the environmental and energy impact of such large-scale operations. Data centers, essential for AI training and processing, consume massive amounts of energy and water, leading to concerns about their sustainability.
Tech companies like Microsoft have also been pouring billions into AI infrastructure. Microsoft, a major backer of OpenAI, recently announced it would invest $80 billion this year to expand AI-focused data centers. Similarly, Amazon has committed to several billion-dollar projects related to data centers. According to a McKinsey report, global demand for data center capacity is expected to triple by 2030, increasing by 19% to 27% annually. To meet this demand, substantial investments will be needed, though experts caution that challenges related to power supply, land availability, and permitting could slow the process.
At the White House announcement, Altman praised the US government’s role in supporting the project and emphasized its potential to shape the future of AI. He also acknowledged that the initiative began before Trump’s presidency, but emphasized that Trump’s involvement had been crucial in bringing it to fruition.
Trump, for his part, expressed his commitment to fostering business investment in the country, particularly in the AI sector. He promised to use emergency declarations to assist in overcoming potential obstacles related to permitting and land acquisition for the construction of the data centers. “I’m going to help a lot through emergency declarations because we have an emergency,” Trump said, underscoring the urgency of keeping AI development in the US.
While the project has received considerable backing from major tech firms, concerns have also emerged about the role of foreign investors, such as SoftBank and MGX. Additionally, questions about the environmental impact of AI data centers persist. Former President Joe Biden, in his final days in office, introduced new regulations aimed at limiting the export of AI-related chips to certain countries, reinforcing the US’s control over AI technology. Biden’s administration also introduced policies to encourage the use of clean energy in powering data centers.
Despite the skepticism surrounding the project’s financial backing, the Stargate Project represents a significant step in the US’s ongoing effort to maintain its leadership in the global AI race. As AI continues to reshape industries, the investment in infrastructure to support this technology will play a critical role in determining which countries and companies lead the way.
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