OpenAI is set to be the main beneficiary of the AI project called Stargate. Up to $500 billion is planned to be invested in new AI data centers by 2029 through a joint venture named Stargate. This project was announced with much fanfare by US President Donald Trump at the beginning of his second term.
Apart from OpenAI, which developed ChatGPT, the project includes Japanese tech investor Softbank, software company Oracle, and Abu Dhabi’s state AI fund MGX. However, Elon Musk, who has a contentious relationship with OpenAI, expressed doubts about the project’s funding shortly after the announcement.
According to a report by the Financial Times, the Stargate project might not be intended to create a publicly accessible AI infrastructure for US or international companies. Instead, the entire investment could be exclusively for the benefit of OpenAI, based on information from sources familiar with the matter.
The project is still on shaky ground. Following the grand announcement, not much progress has been made. The structure and funding of the project remain unclear, and there is no comprehensive commitment for the required funds, according to an insider’s statement to the Financial Times.
Softbank and OpenAI plan to invest $15 billion each into the project. The funds are expected to come from a combination of existing investors’ equity and loans. Softbank also intends to contribute existing fund deposits to the venture. This leaves another $70 billion needed to reach the initial milestone of $100 billion. According to Musk’s earlier comments, the involved companies do not have this money available. Although Musk, who is in a legal dispute with OpenAI, could potentially assist with his wealth, it is highly unlikely he would do so.
Meanwhile, OpenAI investor Microsoft has its own AI infrastructure plans. In September 2024, Microsoft, along with fund manager Blackrock, launched a $30 billion AI infrastructure fund. By 2025, Microsoft plans to invest $80 billion in infrastructure projects, separate from Stargate. CEO Satya Nadella confidently stated that Microsoft has the funds ready, indirectly responding to Musk’s criticisms of OpenAI and Softbank.
In summary, the Stargate project, while ambitious, faces significant challenges in securing the necessary funding and establishing a clear structure. The involvement of major players like OpenAI, Softbank, and Oracle highlights the interest in advancing AI infrastructure. However, the project’s focus on benefiting OpenAI exclusively raises questions about its broader impact on the AI industry. Meanwhile, Microsoft’s independent plans further emphasize the competitive landscape in AI infrastructure development.