During the announcement of the new $500 billion Stargate AI initiative involving OpenAI, Softbank, and Oracle, President Trump expressed that it aims to secure “the future of technology” within the United States. Initial reactions from Wall Street suggest optimism, with analysts predicting significant impacts on the tech industry.
However, the initiative has been met with skepticism, including critical remarks from Elon Musk, one of Trump’s close advisors. Musk tweeted, “They don’t actually have the capital,” alleging that “SoftBank has well under $10 billion confirmed—this I’ve heard from reliable sources.”
In defense, OpenAI CEO Sam Altman responded to Musk on Twitter, asserting, “Incorrect, as you know.”
The speculation surrounding Stargate, named after a popular science fiction franchise involving intergalactic travel, has prompted various inquiries.
In the briefing on Tuesday, the project’s leaders portrayed Stargate as a potential game-changer, focused not on space exploration, but rather on terrestrial technological advancements.
“This initiative will greatly improve lives and address numerous challenges…” said SoftBank’s CEO, Masayoshi Son, who joined Trump alongside Altman and Oracle’s Larry Ellison during the announcement.
Altman further claimed, “I believe this will be the defining project of our era.”
Here’s what we currently know about the Stargate initiative.
What is the Stargate project?
The Stargate venture, supported by OpenAI, Oracle, and Japan’s Softbank, reportedly has an initial funding commitment of $100 billion, as stated in the announcement last Tuesday.
According to Son, the objective is to increase that investment to $500 billion within four years, potentially by the conclusion of Trump’s term.
Softbank will oversee the financing, while OpenAI will manage operational duties, as outlined by Capital Economics chief economist John Higgins. “Trump’s emphatic support for Stargate reinforces the artificial intelligence sector as he begins his second term,” he stated.
Where will Stargate be located?
The Stargate funding will focus on building data centers for AI research and development.
Currently, data centers are being built in Texas, with the first site in Abilene, as noted by Oracle’s Ellison during the press conference. The plan is to initially construct 10 centers, with an aspiration to expand to 20, each approximately half a million square feet in size.
Additional potential sites for data centers around the country will also be assessed, according to sources involved in the project.
What type of projects will Stargate AI undertake?
These data centers are designated for use by OpenAI, according to insiders.
In the press briefing, Ellison emphasized how AI may revolutionize healthcare, pointing out the collaboration between OpenAI and Softbank in developing a cancer vaccine.
“AI can enhance early cancer detection via blood tests, identifying threats to the patient. Then, with gene sequencing, we can create a personalized mRNA vaccine swiftly using AI within 48 hours,” he explained.
How many jobs could Stargate create?
Trump claimed that the initiative would immediately generate “over 100,000 American jobs,” while OpenAI stated on its site that Stargate might spawn “hundreds of thousands of American jobs.”
New employees for the project will be situated near the data center locations, with recruitment for construction, operational duties, and other areas prioritized.
What is President Trump’s AI policy?
Trump is indicating a substantial departure from former President Biden’s AI regulatory approach. Within hours of entering the White House, Trump repealed Biden’s restrictions on the rapidly evolving technology.
The future direction under Trump, in contrast to his predecessor’s aim to regulate AI, remains uncertain as the new administration did not respond to requests for clarification regarding the repealed Biden policies.
Nevertheless, Wall Street seems to view the Stargate initiative as a signal that the Trump administration intends to encourage investment and expand the AI sector, particularly in light of global competition with China.
“The significant involvement of Softbank, a Japanese firm, in Stargate demonstrates that Trump is not focused on excluding foreign companies from America’s AI leadership, particularly those from allied nations,” remarked Higgins.
He also noted, “The new president appears less inclined than his predecessor to impose restrictions on the proliferation of AI.”
Why are some skeptical about Stargate?
In addition to Musk’s skepticism, others have raised doubts about whether Stargate’s investment will actually reach $500 billion, with Higgins stating, “Whether such amounts will be allocated remains uncertain.”
Furthermore, Musk’s contentious relationship with OpenAI and Altman includes allegations made in a lawsuit last year, claiming that the organization strayed from its original mission by prioritizing profits over public benefit. After co-founding OpenAI in 2015, Musk distanced himself from the company, alleging that it had deviated from its foundational commitment to use AI technology for the public good and to make its technology available for public use.
