Newly inaugurated President Trump has wasted no time attempting to make his administration’s early mark on the buzziest topic in the tech industry.
A day after fulfilling his promise to repeal President Biden’s far-reaching executive order on AI, Trump announced a new joint-venture deal to build AI infrastructure in the US with a sci-fi-esque name: Stargate.
Flanked by Sam Altman, Larry Ellison, and Masayoshi Son at a White House press conference, Trump announced a plan for Oracle, SoftBank, and United Arab Emirates-backed investor MGX to build data centers in the US for OpenAI under the banner of Stargate. The joint venture has pledged to spend $100 billion immediately and up to $500 billion over the next four years. Arm, Microsoft, and Nvidia are also “technology partners.”
Trump claimed it is “the largest AI infrastructure project by far in history,” and share prices of the companies involved—and one very much not involved—rose on the news. But there are still many details about the project that have been left vague.
Money questions: On his X platform in the hours after the announcement, Elon Musk, now a White House official as well as a rival of Altman’s, questioned whether the companies involved have the money to fulfill the $100 billion promise.
“They don’t actually have the money,” Musk wrote. “SoftBank has well under $10b secured. I have that on good authority.”
Gavin Baker, a managing partner and CIO at Atreides Management, also doubts whether these companies have the funds.
“Stargate is a great name but the $500b is a ridiculous number and no one should take it seriously unless SoftBank is going to sell all of their [Alibaba] and [Arm shares],” he wrote on X.
Keep up with the innovative tech transforming business
Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.
Xed-out exec order: The Stargate announcement comes on the heels of Trump’s repeal of Biden’s signature AI executive order, which will lead to a more lax regulatory environment for AI companies, including no more “requirements to submit per-market safety training results or notice of large-scale computer cluster acquisition,” according to Gartner senior director analyst Lydia Clougherty Jones.
Clougherty Jones said that while Trump nixed a host of Biden executive orders, the president notably left in place a last-minute order Biden signed earlier this month that seeks to maintain the US’s leadership in data center infrastructure.
“The announcement of Stargate signals the US’s continued commitment to maintaining its global leadership status for AI development and investment,” Clougherty Jones wrote in an email. “It also signals the US federal government’s continued dedication to solving the energy infrastructure challenges to AI development to advance national security, safety, economic competitiveness, and technological advancement.”
Public plus private: The Stargate deal could signal more public-private partnerships to come in the future as the administration shifts away from oversight and toward fast-tracked development, Clougherty Jones said.
“Stargate signals a [move toward] well-funded US public/private partnerships to accelerate active planning and building of AI infrastructure and energy capabilities to safeguard the US’s competitiveness and technology leadership status,” she wrote.
As for the future of AI regulation, we may see Biden’s executive order re-created in individual states in the future. “Although the revocation of the 2023 EO on AI signals a shift away from federal oversight of AI use, this allows the states to step in to fill that gap,” Clougherty Jones said.