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OpenAI and SoftBank have each pledged US$19 billion (S$26 billion) towards Stargate, a massive artificial intelligence (AI) initiative launched by President Donald Trump. With these investments, both companies will acquire a 40% stake each in the venture, according to the Information. The announcement was part of a broader reveal by Trump on January 21, involving OpenAI, SoftBank, and Oracle. This conglomerate aims to inject US$500 billion into the project over four years to ensure the US remains a leader in the global AI technology race against competitors like China.
Stargate plans to initially utilize US$100 billion, with the remainder spread out over the next four years for building data centers and other essential infrastructure. The initiative, spearheaded by SoftBank and OpenAI, is expected to significantly boost AI-related hardware expenditure, as evidenced by a sharp increase in AI stocks following the announcement. SoftBank's shares rose by 6% in Tokyo trading the day after an 11% surge.
However, the project has faced scrutiny for its vague details and financing plans, even drawing skepticism from tech magnate Elon Musk, founder of xAI, who questioned the feasibility of the commitments made during Trump’s announcement. Sam Altman, CEO of OpenAI, described Stargate as resembling a venture fund, with his company and SoftBank serving as the primary investors. Additional financial support is expected from Oracle, Abu Dhabi-backed MGX, and other limited partners and through debt financing, contributing roughly US$7 billion each.
Amidst ongoing debates about its potential impact, Trump has emphasized that maintaining US supremacy in AI is a top priority for his administration. He has promised to foster private-sector growth by streamlining regulatory processes. Despite these assurances, there remains a degree of skepticism regarding whether Stargate will mark a significant advancement over previous initiatives. According to sources, SoftBank's CEO Masayoshi Son had already committed to a similar US$100 billion investment in December at Mar-a-Lago. Oracle’s Larry Ellison has noted that some data centers for the project are already under construction, underscoring ongoing efforts to enhance AI infrastructure.
