The Stargate Project announcement on OpenAI’s website ends with a call for collaboration with companies “across the built data centre infrastructure landscape, from power and land to construction to equipment, and everything in between.”
While announced on 21 January, as part of the incoming President’s penchant for spectacle, The Stargate Project was already well underway having been first reported by The Information in March 2024.
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The timing of the announcement marks President Trump’s commitment to the US technology leaders that helped elect him, as well as his manifesto promise of US AI hegemony.
Could Stargate be Trump’s own version of Roosevelt’s New Deal, something that Biden himself sought to emulate? The announcement and call for companies to participate in the $500bn project to build US AI infrastructure over the next four years has the ambition and breadth of a New Deal style initiative, albeit miniscule capital expenditure in comparison.
But it is a coalescing of private investment, cross-industry sectors and technology companies in a coordinated attempt to give Trump’s new vision of the US a first mover advantage in what many believe is the biggest technological shift in history.
How significant is Stargate?
Global Data senior analyst Beatriz Valle sees the announcement as an extraordinary development. “It seems the new President elect is itching to go and this demonstrates the importance that the new US administration is placing on AI and AI investment,” said Valle.
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By GlobalDataThe AI infrastructure buildout is currently underway, starting in Texas, according to OpenAI’s announcement which also noted, “we are evaluating potential sites across the country for more campuses as we finalise definitive agreements.” According to OpenAI, some $100bn will be deployed immediately.
According to Valle, the move will have a tremendous impact on data centre investment in the US, involving building up to 20 data centres, propelling technologies on the chipset level. “The fact that SoftBank, a Japan based company is spearheading the project demonstrates the US is ready to collaborate with international allies,” she added.
However, collaboration comes alongside trade protections initiated by the Biden administration which implemented export restrictions on AI chips to countries including China and Russia.
“At the policy level, when it comes to the technology market and trade tariffs both administrations – Biden and Trump – behave in similar ways since it was the Biden administration that started US restrictions on the sales of chips to China,” said Valle.
Who are Stargate’s stakeholders?
The initial equity funders in Stargate are SoftBank, OpenAI, Oracle, and UAE investment firm MGX. SoftBank and OpenAI are leading the project, with SoftBank having financial responsibility and OpenAI having operational responsibility. SoftBank founder and CEO Masayoshi Son will be the chairman.
ARM, Microsoft, NVIDIA, Oracle and OpenAI are the key initial technology partners.
As part of Stargate, Oracle, NVIDIA, and OpenAI will closely collaborate to build and operate this computing system, according to OpenAI’s statement. “This builds on a deep collaboration between OpenAI and NVIDIA going back to 2016 and a newer partnership between OpenAI and Oracle,” read the statement.
The project also builds on the existing partnership between OpenAI and Microsoft which has seen the software giant invest almost $14bn in OpenAI. According to OpenAI, the company will continue to increase its consumption of Azure, Microsoft’s cloud offering, as OpenAI continues to work with Microsoft to train leading models and deliver products and services.
Why does Stargate matter?
President Trump’s AI commitment has repercussions for the global technology industry. According to GlobalData Strategic Intelligence Trump 2.0 policy impact report, the global AI race will be front and centre of US foreign policy aims over the coming four years.
The Biden administration’s motivation for the AI export rules was the common assertion that the US only has, at very best, an 18-month lead in AI over China and other rivals, according to the report.
In January, Biden’s parting move on AI chips saw his administration release further export controls on advanced AI chips, cloud access, and AI model weights in the Regulatory Framework for the Responsible Diffusion of Advanced Artificial Intelligence Technology.
The framework now relies on whether the Trump administration decides to maintain, repeal or modify it. Biden’s export controls were not well received by the US chipmaking industry. If Trump decides to ignore the chip lobby and maintain the rules (no sign yet of repealing them) then Trump will wield a powerful geopolitical lever in a critical point in time for AI development when there is everything to play for.
If Trump heeds the chip lobby, many of which make up his new cabal of technology industry allies, AI chip exports are likely to surge.
At this point the deep divisions that are barely concealed under a MAGA coalition of tech oligarchs and true believers will be exposed. The globalist aspirations of the US technology industry versus the nationalistic priorities of MAGA loyalists may become source of conflict that could hamper US AI competitiveness.
Another conflict Stargate may face lies between Trump lieutenant Elon Musk and OpenAI, for which Musk was an early investor turned critic. Hours after Stargate’s announcement, Musk criticised the project on his social media platform X by implying that the funding was exaggerated. “They don’t actually have the money,” he wrote.
