Tech Titans Commit $500 Billion To Trump For AI Expansion, But Musk Is Not Convinced

Hyped ahead of its announcement, U.S. President Donald Trump has declared plans to inject $500 billion into artificial intelligence infrastructure through a new public-private partnership named Stargate. The unveiling, which took place at the White House on Tuesday afternoon, brought together leaders from some of the world’s foremost technology firms, signaling a bold commitment to securing American supremacy in the rapidly evolving AI sector.

Trump characterized the Stargate initiative as “the largest AI infrastructure project in history,” emphasizing its potential to catalyze innovation and economic growth. Accompanying him were prominent industry figures, including Sam Altman, CEO of OpenAI, Masayoshi Son, CEO of SoftBank, and Larry Ellison, Chairman of Oracle Corporation. The consortium pledged an initial investment of $100 billion, with aspirations to escalate funding to $500 billion over the coming years.

“Stargate will build the physical and virtual infrastructure to power the next generation of AI,” Trump stated, highlighting the construction of data centers nationwide as a cornerstone of the project. Ellison noted that the first of these massive data facilities—a one million-square-foot center in Texas—is already underway, underscoring the initiative’s immediate impact.

The Stargate project is projected to generate approximately 100,000 jobs across various sectors, from construction and engineering to software development and data management. This surge in employment is expected to invigorate local economies and reinforce the United States’ position as a global leader in AI technology.

Altman underscored the significance of this investment, remarking, “I think this will be the most important project of this era. We wouldn’t be able to do this without you, Mr. President.” He further elaborated on the necessity of robust infrastructure, stating, “AI is a little bit different from other kinds of software in that it requires massive amounts of infrastructure, power, computer chips, data centers, and we need to build that here and we need to be able to have the best AI infrastructure in the world to be able to lead with the technology and the capabilities.”

The Stargate initiative is a collaborative effort, with SoftBank taking on the financial stewardship of the project while OpenAI manages its operational aspects. Oracle brings its extensive experience in data center management to the table, ensuring the infrastructure meets the highest standards of efficiency and security. Additionally, MGX, a biotechnology firm, is contributing to the funding pool, although specifics of their investment remain undisclosed.

Masayoshi, serving as Stargate’s chairman, expressed optimism about the venture’s prospects. “This is the beginning of the Golden Age,” Son stated, referencing the ambitious scale of the investment and its potential to unlock unprecedented advancements in AI.

“They don’t have the money”

Despite the enthusiasm surrounding Stargate, not all voices in the tech community are wholly optimistic. Elon Musk, Trump’s pick to head his so-called Department of Government Efficiency, publicly criticized the project, questioning the financial viability of the $500 billion investment.

“They don’t actually have the money,” Musk asserted on his social media platform X. “SoftBank has well under $10B secured. I have that on good authority.”

Musk’s comments represent a significant takedown of a major White House project, especially coming from someone closely associated with the administration. His skepticism is further underscored by his ongoing legal battles with OpenAI and its CEO, Sam Altman. Musk, who has expressed distrust towards Altman, claims in a lawsuit that ChatGPT has deviated from its original nonprofit mission by reserving some of its most advanced AI technology for private customers.

Responding to Musk’s allegations, a source familiar with Stargate clarified, “Musk’s assertion is not true. SoftBank has $24.3 billion of cash on its balance sheet per its latest earnings and is comfortable taking on more debt to help fund the project. Additionally, MGX has $100 billion in capital commitments, Oracle has $11 billion in cash, and OpenAI has secured over $10 billion from recent venture capital rounds.”

Satya Nadella, CEO of Microsoft Corporation, which is collaborating with OpenAI on Stargate, addressed the criticism on CNBC Wednesday, stating, “All I know is I’m good for my $80 billion.”

White House press secretary Karoline Leavitt defended the project in a Fox News interview, dismissing Musk’s claims.

“The American people should take President Trump and those CEOs’ words for it,” Leavitt asserted. “President Trump is very excited about this infrastructure announcement in the field of AI, which is obviously growing, and something the United States of America needs to capitalize on, because our adversaries, such as China, are very advanced in this field. So, the American people should take President Trump and those CEOs’ words for it — these investments are coming to our great country, and American jobs are coming along with them.”

In response to Musk’s posts, Altman addressed the claims directly on X, writing, “Wrong, as you surely know. Want to come visit the first site already under way? 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 (America) first.”

Gavin Baker, an analyst with a substantial following on social media, voiced concerns about the feasibility of the $500 billion investment. Baker questioned the realism of such a substantial commitment, especially considering the financial standings of key contributors like SoftBank.

“$500 billion is a ridiculous number and no one should take it seriously unless SoftBank is going to sell all of their BABA and ARM,” Baker poster. He further dissected SoftBank’s financials, highlighting their $38 billion in cash and $142 billion in debt, alongside significant holdings in ARM ($143 billion) and Alibaba at $18 billion. Baker suggested that without major asset liquidation, the promised funds might fall short, potentially bringing the actual investment closer to $50 billion over several years.

“Stargate is fiction wrapped around a much less impressive reality,” Baker continued, urging investors and analysts to approach the $500 billion figure with skepticism unless substantial changes occur in SoftBank’s asset portfolio.

The timing of Stargate’s announcement is critical, as AI continues to be a focal point in global technological competition, particularly between the United States and China. Industry leaders like Altman have long advocated for substantial investment in AI infrastructure to ensure that the U.S. maintains a competitive edge. OpenAI’s recent policy white paper emphasized that without significant domestic investment, global funds totaling $175 billion could bolster Chinese-backed AI projects, thereby enhancing China’s influence in the AI domain.

“Oracle is among the biggest US data center operators,” Altman noted, stressing the strategic importance of American-led initiatives in safeguarding national security and fostering economic resilience.

The Stargate project echoes previous large-scale investment announcements, some of which have had mixed outcomes. For instance, in 2017, Trump announced a $10 billion investment with Foxconn to establish a major electronics factory in Wisconsin. While the initial promise was to create 13,000 jobs, the project faced setbacks, ultimately resulting in a reduced investment of $672 million and fewer than 1,500 jobs. However, Foxconn did establish a significant manufacturing presence in data servers, which has since evolved into a Microsoft data hub focused on AI training and development.

In conjunction with the Stargate announcement, Trump also rescinded an executive order from the Biden administration aimed at monitoring and regulating AI risks. This policy reversal underscores the administration’s prioritization of AI advancement and investment over stringent regulatory measures, potentially accelerating the pace of AI development and infrastructure deployment.


Information for this story was found via CNN and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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