Trump announces $500B AI investment alongside OpenAI, Softbank, and Oracle – Semafor
Sign up for Semafor Technology: What’s next in the new era of tech. Read it now.Donald Trump announced a massive private investment in artificial intelligence infrastructure worth some $500 billion Tuesday. The announcement, first reported by CBS News, was made alongside the CEOs of ChatGPT maker OpenAI, Japanese tech investment firm Softbank, and data-center giant Oracle.Softbank’s Masayoshi Son said the announcement marked a new “golden age,” echoing Trump’s promise in his second inaugural address. OpenAI’s Sam Altman added that the firms “wouldn’t be able to do this without you, Mr. President,” referring to Trump.The joint venture, called Stargate, will see each company initially commit $100 billion and will begin with the opening of a data center in Texas, which has been under construction since mid-2024. The initiative also shares its name with an OpenAI and Microsoft project, first reported by The Information in March last year, to put $100 billion into building an AI supercomputer; Microsoft is “a technology partner” on the new Trump-backed project. Softbank had also previously pledged $100 billion in AI investment in December.OpenAI’s Altman and other leading industry figures have long argued the US should invest in AI infrastructure as a matter of national security, enabling the country to stay technologically ahead of China. In his announcement, Trump underscored the importance of US tech dominance, linking it to his campaign promise to boost US energy output. “The administration is getting advice from the people who really understand what’s happening at the cutting edge,” Google Deepmind CEO Demis Hassabis told Bloomberg on Tuesday.The announcement came after Trump rescinded the Biden administration’s sweeping AI executive order, essentially eliminating guardrails designed to safeguard consumers. The German Startups Association told its members that Stargate should be a “wake-up call” for Europe to boost economic growth and technological innovation. “Germany and Europe must get going, because the USA is already sprinting,” the group said in a statement. Economists have for years warned that Europe is falling behind the US and China in the technological revolution, with many blaming the lag on the bloc’s overregulation. “The EU’s stance on innovation reveals a preference for control over progress,” wrote GIS, a center-right think tank, pointing to the EU’s AI Act that set up guardrails for AI companies. Donald Trump ally and tech billionaire Elon Musk appeared skeptical about the Stargate project, marking an “early break” between the two men, Politico wrote, underscoring what pundits have described as their “fragile” alliance. Musk, who has engaged in a years-long public feud with OpenAI’s Sam Altman, alleged that the company “[doesn’t] actually have the money,” to fund Stargate. Musk’s critics believe Trump has given the tech mogul too much influence in Washington, including on immigration and federal budget decisions, but Stargate shows that the president is also ready for OpenAI to “expand its influence further, with or without Musk’s approval,” tech news site CCN wrote.AI data centers are expected to use 8% of total energy in the US by 2030, according to Bloomberg, representing a substantial source of demand for fossil fuels, nuclear power, expanded electricity grids, as well as internet bandwidth, water, and rare minerals for semiconductors. The demand is pitting innovators — who are prioritizing building more efficient AI — against investors, who are “getting tired of waiting for the technology to translate into meaningful profits,” Bloomberg wrote. Protectionist trade policies could further slow development by restricting the flow of some of these critical resources and AI data, and tech titans at The World Economic Forum in Davos this week are hoping to convince global leaders that they must overcome protectionism to fuel the AI revolution, SwissInfo reported.Sign up for Semafor technologyTransparent news, distilled views, and global perspectives.
