Trump announces $500 billion private-sector investment in AI infrastructure

• President Donald Trump announced a $500 billion private-sector investment to build AI infrastructure in the United States
• OpenAI, SoftBank, and Oracle are leading the project, with $100 billion allocated for immediate deployment
• The project aims to support AI advancements, including systems to analyse electronic health records and assist doctors in patient care

On Tuesday, January 21, the United States President, Donald Trump, announced a groundbreaking private-sector investment of up to $500 billion to develop artificial intelligence (AI) infrastructure, aiming to solidify America’s leadership in this critical technology sector.

The ambitious initiative, named "Stargate," is a joint venture between OpenAI, SoftBank, and Oracle. 

Trump revealed that the project will involve building cutting-edge data centres across the United States, creating over 100,000 new jobs.

The participating companies and their equity backers have pledged an initial $100 billion for immediate use, with the remaining investment expected to roll out over the next four years. 

The announcement was made at a White House event attended by SoftBank CEO Masayoshi Son, OpenAI CEO Sam Altman, and Oracle Chairman Larry Ellison.

Data centres at the core of Stargate

Ellison announced that the first of the project’s 20 data centres, each spanning 500,000 square feet, is already under construction in Texas. 

These facilities will support advanced AI applications, including systems to analyse electronic health records and assist doctors in patient care.

During the press conference, Son credited Trump’s leadership for the initiative. "We wouldn't have decided to do this unless you won," he said. 

Altman echoed this sentiment, stating that the project would not have been possible without Trump’s support.

Past reports on Stargate

This announcement follows earlier reports from March 2024 by The Information, a technology news outlet, which indicated that OpenAI and Microsoft were planning a $100 billion data centre project under the same name. 

That venture, focused on launching an AI supercomputer by 2028, now appears to be linked to the newly announced Stargate project.

The demand for AI infrastructure has surged as companies integrate artificial intelligence into their products and services. 

However, the energy-intensive nature of AI poses challenges. 

Trump assured that the necessary power for these data centres would be made readily available, including through the construction of private power plants.

AI-driven data centres are expected to significantly increase U.S. energy consumption in the coming years. 

A December report from the North American Electric Reliability Corporation warned that nearly half the country faces a heightened risk of power supply shortages within the next decade.

Trump’s announcement comes on the heels of his reversal of former President Joe Biden's executive order on AI, which had focused on mitigating the risks AI poses to workers, consumers, and national security. 

This marks a renewed focus on growth and infrastructure, following Trump’s unfulfilled promise during his first term to pass a $1 trillion infrastructure bill.

The news sparked a positive reaction on Wall Street, with Oracle shares rising 7% on the initial announcement. 

Stocks of Nvidia, Arm Holdings, and Dell also saw gains as investors reacted to the potential of AI advancements.

The Stargate project highlights the growing momentum in AI investment, which has soared since the launch of OpenAI's ChatGPT in 2022. 

As the United States aims to lead the global AI race, this initiative could mark a pivotal moment in shaping the future of artificial intelligence.

Elon Musk’s xAI secures $6 billion in Series B funding

Meanwhile, TheRadar earlier reported that Elon Musk's artificial intelligence company, xAI, announced the successful conclusion of its Series B funding round, raising an impressive $6 billion.

In a statement on its blog, xAI disclosed that the funding round attracted prominent investors, including Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal, and Kingdom Holding.