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Tech giants are putting $500bn into 'Stargate' to build up AI in US
8 hours agoJoão da Silva, Natalie Sherman & Imran Rahman-Jones
Business reporters & technology reporter
The creator of ChatGPT, OpenAI, is teaming up with another US tech giant, a Japanese investment firm and an Emirati sovereign wealth fund to build $500bn (£405bn) of artificial intelligence (AI) infrastructure in the United States.
The new company, called The Stargate Project, was announced at the White House by President Donald Trump who billed it "the largest AI infrastructure project by far in history" and said it would help keep "the future of technology" in the US.
But Elon Musk - both a top adviser to Trump and rival to OpenAI CEO Sam Altman - on Wednesday said the venture does not "actually have the money" it has pledged to invest.
Investment in AI is currently exploding, driving demand for new data centres while also raising concerns about the huge amounts of water and power the facilities require.
The venture is a partnership between OpenAI, Oracle, Japan's Softbank - led by Masayoshi Son - and MGX, a tech investment arm of the United Arab Emirates government.
The companies said the new venture, which was in the works before Trump took office, had $100bn in funding available immediately, with the rest to come over four years, creating an estimated 100,000 jobs.
Commenting on a post on X where OpenAI detailed the plans, Musk, who owns the platform, wrote "They don't actually have the money."
"SoftBank has well under $10B secured. I have that on good authority," he added.
Musk, however, did not provide any details or substantiation for how he had arrived at the much smaller amount.
Altman then replied: "Wrong, as you surely know."
"Want to come visit the first site already under way?" Altman added. "This is great for the country. I realize what is great for the country isn't always what's optimal for your companies, but in your new role I hope you'll mostly put US first."
Musk is spearheading Trump's government efficiency efforts and will closely advise Trump on spending. He, though, has also been feuding with Altman since leaving OpenAI's board in 2018 and launching his own AI start-up.
A source close to Stargate said it was not clear where Musk had gotten his information and that the company was well-positioned to deploy $100 bn.
Stargate's first data centre is under construction in Texas, according to Oracle's chief technology officer, Larry Ellison, and more will be built in other US locations.
"I think this will be the most important project of this era," said Altman at Trump's Tuesday announcement, standing alongside the President at the White House.
"We wouldn't be able to do this without you, Mr President," he added, even though the project was underway before Trump won November's election.
'Most important project of this era'
The US is already the world leader in AI investment, vastly outspending any other country, and its big tech companies have been making major investments into data centres in the last year.Microsoft, one of the OpenAI's major backers, said earlier this month it was on track to invest $80bn to build out AI-focused data centres this year.
It is also involved in a $100bn venture that includes BlackRock and MGX and is focused on making AI data centre investments.
Amazon has been pouring money into the centres at a similar scale, announcing two projects worth about $10bn each in just the last two months.
In a report last year, McKinsey said that global demand for data centre capacity would more than triple by 2030, growing between 19% and 27% annually by 2030.
For developers to meet that demand, the consultancy estimated that at least twice the capacity would have to be built by 2030 as has been constructed since 2000.
But analysts have warned that the process is likely to be bogged down by issues such as power and land constraints and permitting.
Trump, who has claimed credit for fostering business investment, promised he would intervene to help the industry.
"I'm going to help a lot through emergency declarations because we have an emergency," he said, stressing the importance of keeping AI in the US.
Trump said his government would "make it possible for them to get that production done very easily."
Mushrooming demand
OpenAI has long called for more investment into data centres for AI. The Information, a technology news website, first reported on the Stargate project in March last year.Other technology partners include British chipmaker Arm, US chipmaker Nvidia and Microsoft, which already has a partnership with OpenAI.
Along with Musk's scepticism about funding for the specific project, there are growing concerns generally about the data centres taxing energy supplies and questions about the role of foreign investors.
In one of his final acts in the White House, former President Joe Biden put forward rules that would restrict exports of AI-related chips to dozens of countries around the world, saying the move would help the US control the industry.
He also issued orders related to the development of data centres on government land, which spotlighted a role for clean energy in powering the centres.
Stargate: Tech giants announce AI plan worth up to $500bn
Trump has extolled the project as an important investment, but Elon Musk is throwing shade on it.
www.bbc.com
