Stargate, an ambitious artificial intelligence (AI) infrastructure initiative promising to transform America into the global leader in AI development, which was announced this week by U.S. President Donald Trump, will be exclusive to OpenAI, the creator of ChatGPT.
With a projected $500 billion budget over four years, the project was introduced as a testament to American ingenuity.
Stargate is backed by OpenAI and SoftBank as its primary drivers, with founding partners Oracle and Abu Dhabi’s state AI fund MGX also contributing. The project’s initial funding goal is $100 billion, with plans to scale up to $500 billion to build next-generation data centers and infrastructure exclusively for OpenAI’s use.
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“The intent is not to become a data center provider for the world—it’s for OpenAI,” said one insider.
While the scale of Stargate’s ambitions is unprecedented, the exclusivity of its services to OpenAI has among other things, brought about a surprising shift in the relationship between OpenAI CEO, Sam Altman and Trump.
Industry experts argue that focusing resources on a single entity could limit the democratization of AI innovation and potentially give OpenAI disproportionate influence in the AI space.
Funding Uncertainties and SoftBank’s Role
Stargate has yet to secure the financing required to execute its plans. Insiders revealed that the project will receive no government funding, relying instead on equity and debt raised by its backers.
SoftBank and OpenAI have committed over $15 billion each as anchor funding for Stargate. SoftBank, under its ambitious chairman Masayoshi Son, is expected to inject additional capital from existing funds. However, insiders remain cautious about whether the initiative can raise the remaining billions needed.
“They haven’t figured out the structure, they haven’t figured out the financing, they don’t have the money committed,” said a source close to the project, quoted by The FT.
Microsoft, a major backer of OpenAI, will provide technical support without direct financial contribution to Stargate. Notably, Microsoft has independently launched a $30 billion AI infrastructure fund with BlackRock and plans to invest $80 billion in infrastructure projects this year, underlining its autonomy from OpenAI’s new initiative.
Altman has been vocal about the need for unprecedented computing power to achieve his ultimate goal: artificial general intelligence (AGI). AGI refers to AI systems that surpass human cognitive abilities, revolutionizing industries and scientific research while potentially supplanting humans in the workforce.
Altman’s vision has necessitated forging partnerships beyond OpenAI’s exclusive ties with Microsoft. For over two years, he has been in discussions with SoftBank’s Masayoshi Son about potential collaborations in AI. Their talks culminated in detailed plans for Stargate in the months leading up to this week’s announcement.
Political Overtones: Altman’s Shift on Trump
The Stargate announcement also marked a surprising political pivot for Altman. Once an outspoken critic of Trump, Altman has recently expressed admiration for the president’s leadership.
“Watching [Trump] more carefully recently has really changed my perspective on him,” Altman wrote on X (formerly Twitter). “I think he will be incredible for the country in many ways!”
This newfound support follows Trump’s repeal of an executive order by President Joe Biden, which placed regulatory guardrails on AI development. Trump also announced a $500 billion private-sector investment in AI infrastructure, further aligning with Altman’s goals.
Altman’s shift in tone has drawn backlash. Tesla CEO Elon Musk, a former OpenAI co-founder, mocked Altman’s reversal by reposting his old tweets criticizing Trump. Musk also claimed that Stargate’s backers lacked the necessary funds, prompting Altman to counter: “Wrong, as you surely know.”
Altman’s $1 million personal donation to Trump’s inauguration fund added to the controversy, as did contributions from other tech titans, including Amazon and Meta, who each donated $1 million. Many believe that such gestures highlight the growing entanglement of AI development with political influence.
Stargate’s Infrastructure Plans Take Shape
Despite financial uncertainties, work has already begun on Stargate’s first data center in Abilene, Texas. Data center start-up Crusoe, backed by $3.4 billion in financing from Blue Owl, has been constructing the facility since June 2023. Oracle is expected to invest $7 billion in chips to power the site, which will be dedicated to OpenAI’s computing needs.
The Stargate project will be structured as a standalone entity, with OpenAI, SoftBank, Oracle, and MGX holding stakes. The company will feature two divisions: an operational unit led by OpenAI to oversee data center construction and management, and a capital-raising unit under SoftBank’s purview.
The timing of the announcement, coinciding with Trump’s inauguration, has also raised questions. Insiders suggest the decision was driven more by optics than readiness.
“People want to do splashy things in the first week of Trump being in office,” said a source familiar with the project.
Stargate is launching at a time of heightened competition in AI infrastructure. Microsoft, Google, and Amazon are all investing heavily in cloud computing and AI capabilities. Microsoft’s independent efforts, including its $30 billion fund with BlackRock, signal a divergence from OpenAI’s plans.
Meanwhile, geopolitical tensions have highlighted the strategic importance of AI. Stargate’s inclusion of Abu Dhabi’s state AI fund MGX reflects the growing involvement of Middle Eastern players in global tech investments.