Author: Chloe, PANews
On January 21, Trump invited SoftBank CEO Masayoshi Son, OpenAI CEO Sam Altman, and Oracle co-founder Larry Ellison to the White House on his first full day in office.
At the press conference, Trump announced that SoftBank, OpenAI, and Oracle will jointly establish a new AI company called Stargate. Trump said, "This is the largest AI infrastructure project in history.
These companies will initially invest $100 billion in this AI project, with the goal of increasing it to over $500 billion, including the construction of data centers and physical campuses. Microsoft and NVIDIA are also expected to participate. Trump stated that the project is also expected to create 100,000 jobs in the United States.
According to insiders, in December 2024, Masayoshi Son visited Trump's private residence in the southern United States in Florida and announced that he would invest $100 billion in the US during Trump's 4-year term. It is reported that most of the investment will be related to AI, and the first phase seems to have already begun. Trump even publicly praised Son as a "great leader and investor" at the time, and jokingly asked him, "Would you be willing to increase your investment to $200 billion?"
According to media reports, the initial equity investors of Stargate are SoftBank, OpenAI, Oracle, and MGX. Among them, SoftBank and OpenAI are the main partners, with SoftBank taking on the financial responsibility and Son serving as the chairman, while OpenAI takes on the operational responsibility. Oracle, Microsoft, Arm, and NVIDIA are all participating as technology partners.
Trump officially abandons energy policy and focuses on AI infrastructure
Over the past few months, CEOs of major AI tech giants have been continuously warning the government that more data centers and the chips, power, and water resources needed to run them are needed to support the companies' AI development in the coming years.
Shortly after Trump's inauguration, he canceled the AI guardrails imposed by Biden and signed a series of measures to promote the development of US energy to meet the growing power demand of data centers. The Biden administration had tried to address the potential risks of AI over the past two years, but the new president Trump's new actions, such as revoking Biden's AI executive order and supporting AI infrastructure, are completely the opposite, conveying the message that he will vigorously develop the infrastructure.
"I think this will be the most important project of this era," Sam Altman said at the January 21 press conference. "Without President Trump, we cannot accomplish this work." Trump responded that he will use emergency declarations and executive actions to help build the project, including easier access to energy. At the press conference, Trump and senior officials emphasized the potential applications of AI in healthcare and other fields, and will promote the overall economic growth of the United States in the future.
Previously, Sam Altman revealed that OpenAI is constantly increasing its computing needs to train more complex AI models and provide services. In addition to continuing to expand the use of Microsoft Azure, cloud infrastructure providers such as Amazon and Oracle are also competing to expand their data centers to increase computing power.
However, the cost of data centers is not to be underestimated. According to McKinsey's forecast, the capital expenditure for procuring and installing the electromechanical systems of the data centers needed to support the development of AI over the next 5 years may exceed $250 billion.
Where will the funds for Stargate's infrastructure construction come from? If Trump relies on government funding, Congress will have to approve a budget of hundreds of billions of dollars, but this also contradicts Trump's advocacy of reducing government spending.
OpenAI's valuation is not enough, SoftBank as the financial backer?
Since no official announcement has been made yet, it is unclear how much funding SoftBank, OpenAI, and Oracle will respectively inject into the $500 billion AI infrastructure project, which has led to market doubts about the source of funds. Given OpenAI's current valuation of $150 billion, it is obviously unable to support Trump's such a large-scale plan.
However, from the preliminary press conference information, it can be estimated that OpenAI will be responsible for the operational guidance, Oracle as one of the largest data center operators in the US will provide technical resources, while SoftBank has the strong financial strength required for the development of AI infrastructure.
Interestingly, OpenAI has already received investment from the SoftBank Group in 2024. So far, OpenAI has been using the services of its partner Microsoft Azure for AI development, but the market believes that Microsoft's computing power cannot keep up with OpenAI's demand. If OpenAI extends its AI development infrastructure to collaborate with SoftBank and Oracle, it will be a great benefit for OpenAI.
Sam Altman also said in an interview with Fox News last month that he believes Trump is "good at" attracting AI infrastructure investment to the US, and expressed that he "looks forward to cooperating with his government in this regard." "America's infrastructure is very important, AI is a bit different from other types of software, because it requires a lot of infrastructure, electricity, computer chips, and data centers.
He also estimated that there is currently $175 billion in global capital waiting to be invested in AI projects. "If the US cannot attract this capital, it will flow to projects supported by other countries, weakening the US's global influence."
Market capital is gradually flowing back to AI projects
After the Stargate news was released, Oracle's stock price rose about 7%, Nvidia rose 2.3%, and Arm rose 4.1%. Wall Street analysts said: "This is an important opportunity for Oracle, which could become a key infrastructure provider for this large-scale investment."
According to SoSoValue data today (22nd), the AI Agents sector benefited from Stargate, with a 24-hour increase of 10.47%. PIPPIN, ARC, and AI16Z rose 104.82%, 44.63%, and 30.17% respectively, and VIRTUAL rose 11.95%.
Previous data from Dune Analytics showed that the daily trading volume of Virtual Protocol has been declining since reaching a peak on January 2, and the overall revenue in January decreased by 99%. An important factor behind this is the rise of TRUMP and MELANIA, especially in the past week, the MEME sector has become the overall focus of the market, draining liquidity from other areas, including the AI agent market, causing a 10% drop in the market value of AI tokens on January 20. Now that MEME is gradually cooling down and Stargate is unfolding, market capital is gradually flowing back to AI projects.
