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After scrapping the Biden administration’s executive order on artificial intelligence, President Donald Trump announced a half-a-trillion-dollar AI infrastructure plan alongside some of the technology’s top leaders.
The president was joined by OpenAI chief executive Sam Altman, SoftBank (SFTBY+11.16%) chief executive Masayoshi Son, and Oracle (ORCL+6.49%) chief technology officer Larry Ellison at the White House on Tuesday evening where he announced the Stargate Project, the largest in U.S. history.
The new joint venture “intends to invest $500 billion over the next four years building new AI infrastructure for OpenAI in the United States,” the AI startup said in a statement.
Stargate is starting with an initial $100 billion investment and counts OpenAI, SoftBank, Oracle, and Abu Dhabi-based AI investor MGX as initial equity funders.
Here’s what else you need to know about the Stargate Project.
What will the Stargate project do?
The Stargate project is investing in building new data centers and other AI infrastructure in the U.S. The investment “will secure” the U.S.’s AI leadership, provide hundreds of thousands of jobs, “and generate massive economic benefit for the entire world,” according to OpenAI.
Stargate will “support the re-industrialization of the United States” and “provide a strategic capability to protect the national security of America and its allies,” the startup added.
SoftBank and OpenAI are co-leading the project, with SoftBank taking financial responsibility and OpenAI overseeing operations. Son will be Stargate’s chairman.
Elon Musk, a close Trump ally with his own AI startup, responded to the news on X that he has “on good authority” that the Japanese bank “has well under $10B secured.”
Altman responded that Musk was “wrong” and invited the billionaire to visit the first site under construction.
Who else is involved in Stargate?
Along with OpenAI and Oracle, British chip design firm Arm (which SoftBank has a 90% stake in), Nvidia (NVDA+4.40%), and OpenAI’s longstanding partner, Microsoft (MSFT+3.84%), will be “key technology partners” in the project.
OpenAI, Oracle, and Nvidia will work together on the project’s first buildout in Texas, OpenAI said, adding that the computing system is a result of a years-long collaboration between it and Nvidia, and a new partnership between it and Oracle.
Ellison said Tuesday that the project’s first data centers are already under construction.
“Each building is a half a million square feet,” Ellison said. “There are 10 buildings currently being built, but that will expand to 20 and other locations beyond the Abilene location, which is our first location.”
The project is still evaluating other potential sites and finalizing definitive agreements.
What does this mean for OpenAI and Microsoft’s partnership?
OpenAI said the project builds on its relationship with its largest investor and exclusive compute provider, Microsoft. The startup plans to continue increasing its use of Microsoft’s Azure cloud computing service, it said, alongside the “additional compute” from Stargate.
In March, The Information reported that OpenAI and Microsoft were planning a U.S.-based data center that could cost up to $100 billion and house a supercomputer made up of millions of AI chips — also called “Stargate.”
However, after it raised a $6.6 billion funding round in October, The Information reported that OpenAI was looking for other data center deals after its chief financial officer Sarah Friar had previously told some shareholders it wasn’t getting enough compute power fast enough from the tech giant.
Microsoft said on Tuesday that a new agreement with OpenAI “includes changes to the exclusivity on new capacity” and will follow a model where Microsoft has the right of first refusal.
“To further support OpenAI, Microsoft has approved OpenAI’s ability to build additional capacity, primarily for research and training of models,” the company said.
In an interview with CNBC at the World Economic Forum in Davos, Microsoft chief executive Satya Nadella said the company will continue spending $80 billion building out its cloud computing and that “customers can count on Microsoft with OpenAI models being there everywhere in the world.”