What is Stargate? Trump’s $800b AI investment explained

One of President Donald Trump’s first announcements has been Stargate, a new joint venture designed to unlock up to $US500 billion ($800 billion) in private sector investment to fund AI infrastructure, create more than 100,000 jobs, and help the US stay ahead of its fast-moving rivals like China.

What is Stargate?

Stargate, in Trump’s words, represents the largest AI infrastructure project in history “by far” and is a joint venture that will invest $US500 billion to construct the network of data centres and computing infrastructure needed to power artificial intelligence development.

Donald Trump’s AI announcement has ruffled feathers.Credit: Bloomberg

The project will – at least according to Trump – create more than 100,000 jobs “almost immediately.” Oracle boss Larry Ellison said 20 data centres would be built over the next five years, with each half a million square feet (46,452 square metres) in size. Initial construction is apparently already under way in Texas.

Who are the key players?

Stargate will bring together ChatGPT maker OpenAI, US data centre giant Oracle, Japanese investment giant SoftBank and UAE-based investment firm MGX. The chief executives of SoftBank, OpenAI and Oracle have a combined net worth of more than $400 billion, and each attended Trump’s inauguration.

The financial details behind Stargate’s ownership structure have not been announced, but Masayoshi Son, the billionaire founder of SoftBank, will serve as its chairman.

Nvidia, Oracle, OpenAI, Microsoft and Arm will serve as the key technology partners for the project to help build it out.

What has Elon Musk said?

Musk, who has become one of Trump’s closest advisers, was quick to criticise the announcement, presumably because his companies weren’t directly involved.

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

OpenAI chief executive Sam Altman hit back, replying to Musk, “wrong, as you surely know.”

At loggerheads over AI: Elon Musk and OpenAI’s Sam Altman.Credit: Bloomberg, AP

“Want to come visit the first site already under way?,” Altman wrote. “This is great for the country. I realise 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 [the US] first.”

Musk, who has his own AI company called xAI, has an ongoing public feud with OpenAI and Altman dating back a decade. The Tesla chief helped found OpenAI in 2015 but later separated from the company, claiming it had veered away from its early promises of using its technology to benefit the public. In March, Musk and xAI sued OpenAI, alleging breach of contract. Musk later dropped that suit and, in August, sued Altman in federal court in a matter that remains ongoing.

Microsoft chief executive Satya Nadella told CNBC on Wednesday that “all I know is I’m good for my $80 billion.”

What are the politics behind the announcement?

The US is already the world leader in AI investment, vastly outspending any other country. The Stargate announcement came just one day after Trump reversed former president Joe Biden’s 100-page executive order on AI safety, signalling a dramatic shift in policy under the new administration. In moves likely heavily influenced by tech executives who are close to the new president, including Musk, Trump said he wants the US to outflank the likes of China, which is moving quickly.

“What we want to do is we want to keep it in this country. China is a competitor; others are competitors. We want to be in this country, and we’re making it available,” Trump said at a press conference at the White House.

“I’m gonna help a lot through emergency declarations because we have an emergency; we have to get this stuff built. So they have to produce a lot of electricity. And we’ll make it possible for them to get this production done easily, at their own plants if they want.”

There’s much at stake, with whoever wins the AI arms race set to dominate the future of technology. OpenAI said in a statement of its own that Stargate would “secure American leadership in AI”.

“This infrastructure will … create hundreds of thousands of American jobs and generate massive economic benefit for the entire world,” the company said.

There will be hurdles: analysts have warned that land constraints and electricity demands will need to be dealt with.

How could it affect Australia?

There’s a perception among some in Australia’s technology sector that Australia has focused too much on AI safety and regulation rather than seizing AI’s opportunities – and has been slow to move. A recent nine-month Senate committee issued 13 recommendations, including sweeping EU-style legislation for Australia that would introduce guardrails against high-risk AI use cases across the economy.

Australia is home to several AI start-ups, including Harrison.ai, Leonardo.ai, and the AI-focused quantum computing firm Q-CTRL, but they lack the size and scale of US heavyweights like OpenAI, Nvidia and Oracle.

Dr Emmanuelle Walkowiak, a vice chancellor’s senior research fellow at RMIT University, said Stargate could rapidly reshape industries, the labour market, and the Australian AI regulatory framework.

“This announcement could prompt considerations on several issues: Should Australia tighten regulations or create a parallel AI infrastructure push?” Walkowiak said.

“Might we try to impose more responsible, transparent frameworks on global tech players? Does more need to be done to further protect Australian data sovereignty?”

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