By Billy Perrigo
January 22, 2025
President Donald Trump on Tuesday announced a $500 billion joint venture between OpenAI, Softbank, MGX and Oracle to build new datacenters to power the next wave of artificial intelligence (AI) – in an early signal that his Administration would embrace the technology.
The plans, which predate the Trump Administration and involve no U.S. government funds, would result in the construction of large datacenters on U.S. soil containing thousands of advanced computer chips required to train new AI systems.
Trump cast his support for the venture in part as a matter of national competitiveness. “We want to keep it in this country; China’s a competitor,” Trump said of AI. “I’m going to help a lot through emergency declarations – we have an emergency, we have to get this stuff built.”
The message echoed recent talking points by the heads of AI companies like Sam Altman of OpenAI, who flanked him during the White House announcement. Altman has argued more vocally in recent months that the U.S. must race to build the energy and datacenter infrastructure in order to create powerful AI before China.
The intent is to build datacenters on American soil, so that the U.S. retains sovereignty over the AI models that are created and run there. Some of the financing for Stargate, however, comes from abroad, via MGX, an investor owned by an Abu Dhabi sovereign wealth fund, and Softbank, which is Japanese.
OpenAI and Oracle have been working on building out datacenter capacity in the United States since long before Trump’s inauguration, and construction is reportedly already underway on some of the facilities connected to Stargate. The new President’s blessing, however, is a win both for OpenAI – which like all tech companies has attempted to position itself in Trump’s favor – and for Trump himself, who has seized on AI as a means for strengthening the U.S. economy and achieving dominance over China.
Stargate also appears to mark an end to OpenAI’s exclusive cloud computing partnership with Microsoft, meaning the startup is now free to train its models with other providers. In return for early investment, OpenAI had agreed to train its AIs only on Microsoft’s systems. But the startup has chafed in the past at what insiders felt was Microsoft’s inability to supply it with enough computing power, according to reports. Microsoft remains a large investor in OpenAI, and gains a share of its revenue.
What could Stargate mean?
The goal behind Stargate is to create the infrastructure required to build even more powerful AI systems – systems that could perform most economically valuable tasks better and faster than humans could, or that could make new scientific discoveries. Many AI investors and CEOs believe this technology, sometimes referred to as artificial general intelligence, is attainable within the next five years or fewer.
But to get there, those AIs need to first be trained. This presents a problem, because the bigger an AI you want to train, the more interlinked chips you need in a datacenter, and the larger the electricity capacity of that datacenter needs to be. Currently, experts say, AI’s performance is bottlenecked by these two factors, especially power capacity.