Trump announces a $500 billion AI infrastructure plan, Stargate, as AI establishes its dominant position in the market this year

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 a press conference, Trump announced that SoftBank, OpenAI, and Oracle would jointly establish a new AI company called Stargate, stating, "This is the largest AI infrastructure project in history."

These companies will initially invest $100 billion in this artificial intelligence project, with a goal of increasing it to over $500 billion, which includes building 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 Florida and announced that he would invest $100 billion in the U.S. during Trump's four years in office. It is reported that most of the investment will be related to AI, and it now appears that the first phase has begun. Trump even publicly praised Masayoshi Son as a "great leader and investor," jokingly asking him, "Are you willing to increase your investment to $200 billion?"

Currently, according to foreign media reports, the initial equity funders of Stargate are SoftBank, OpenAI, Oracle, and MGX. Among them, SoftBank and OpenAI are the main partners, with SoftBank taking on financial responsibilities, Masayoshi Son serving as chairman, and OpenAI handling operational responsibilities, while Oracle, Microsoft, Arm, and NVIDIA participate as technology partners.

Trump Officially Abandons Energy Policy, Focuses on AI Infrastructure

In recent months, CEOs of major AI tech companies have continuously warned the government that more data centers and the chips, electricity, and water resources needed to operate them are required to support the development of AI in the coming years.

Shortly after Trump was sworn in, he canceled the AI guardrails imposed by Biden and signed a series of measures to promote U.S. energy development to meet the increasing electricity demands of data centers. The Biden administration had attempted to address the potential risks of AI over the past two years, but the new actions of President Trump, such as rescinding Biden's AI executive order and supporting AI infrastructure, completely go against this, sending a message that infrastructure development will be heavily promoted.

"I believe this will be the most important project of our time," Sam Altman stated at the press conference on January 21. "Without President Trump, we cannot accomplish this." Trump responded that he would use emergency declarations and executive actions to help with the construction projects, including making it easier to access energy. At the press conference, Trump and senior officials emphasized the potential applications of AI in health and other fields, which will drive overall economic growth in the U.S.

Previously, Sam Altman had revealed that OpenAI was continuously increasing its computational demands to train more complex AI models and provide services. In addition to continuing to expand its use of Microsoft Azure, cloud infrastructure providers such as Amazon and Oracle are also competing to expand data centers to enhance computational capacity.

However, the costs of data centers cannot be underestimated. According to McKinsey's predictions, the capital expenditures for procuring and installing the mechanical and electrical systems behind the development of AI data centers could exceed $250 billion over the next five years.

So where will the funding for Stargate's infrastructure come from? If Trump relies on government funding, Congress would need to approve hundreds of billions in budget expenditures, which contradicts Trump's stance on advocating for government spending cuts.

OpenAI's Valuation Insufficient, Is SoftBank Taking on Funding?

As no official announcements have been made, it is unclear how much funding SoftBank, OpenAI, and Oracle will inject into the $500 billion AI infrastructure project, raising market questions about the source of the funds. Given OpenAI's current valuation of $150 billion, it is evident that it cannot support such a large-scale plan by Trump.

However, from the initial press conference information, it can be inferred that OpenAI will guide operations, Oracle, as one of the largest data center operators in the U.S., will provide technical resources, while SoftBank possesses the strong financial strength needed to develop AI infrastructure.

Interestingly, OpenAI had already received investment from SoftBank Group in 2024. So far, OpenAI has been using its partner Microsoft Azure services for AI development, but the market believes that Microsoft's computing power cannot keep up with OpenAI's demands. If OpenAI extends its infrastructure development to collaborate with SoftBank and Oracle, it would be a significant advantage for OpenAI.

Moreover, Sam Altman stated in an interview with Fox News last month that he believes Trump is "good at" attracting AI infrastructure investments to the U.S. and expressed his "anticipation to cooperate with his administration in this regard." "U.S. infrastructure is very important; AI is somewhat different from other types of software because it requires a lot of infrastructure, electricity, computer chips, and data centers."

He also estimated that currently, $175 billion globally is waiting to be invested in AI projects. "If the U.S. cannot attract this funding, it will flow to projects supported by other countries, weakening America's influence globally."

Market Funds Gradually Flowing Back to AI Projects

After the news of Stargate was released, Oracle's stock rose about 7%, NVIDIA increased by 2.3%, and Arm's stock rose by 4.1%. Wall Street analysts stated, "This is an important opportunity for Oracle; it could become a key infrastructure provider for this large-scale investment."

According to SoSoValue data on the 22nd, the AI Agents sector benefited from Stargate, with a 24-hour increase of 10.47%. PIPPIN, ARC, and AI16Z rose by 104.82%, 44.63%, and 30.17%, respectively, while VIRTUAL increased by 11.95%.

Previous data from Dune Analytics indicated that the daily trading volume of Virtual Protocol has been declining since it peaked on January 2, with overall revenue in January dropping by 99%. An important factor behind this is the rise of TRUMP and MELANIA, especially in the past week, where the Meme sector became the overall market focus, draining liquidity from other areas, including the AI agent market, leading to a 10% drop in the market value of AI tokens on January 20. Now that the Meme hype is gradually cooling down and with the launch of Stargate, market funds are gradually flowing back to AI projects.