Stargate artificial intelligence project to serve only OpenAI

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Stargate, the high-profile artificial intelligence project announced by Donald Trump this week, will only serve ChatGPT developer OpenAI, according to people familiar with the matter.

The project plans to spend $100bn on Big Tech infrastructure projects, with the figure rising to $500bn over the next four years, OpenAI and SoftBank, two of Stargate’s backers, said on Tuesday. Oracle and Abu Dhabi state AI fund MGX are also forming partners.

Trump praised the SoftBank-backed project on Tuesday at a White House event attended by OpenAI CEO Sam Altman and other tech executives as “a strong declaration of confidence in America’s capabilities under the new president.”

Despite the surprise announcement, Stargate has not received the money it needs, will not receive government funding and will only serve. OpenAI once completed, people familiar with the project said.

“The goal is not to be a data services provider for the world, it’s for OpenAI,” said one of the people.

A person close to the project said that it is far from a fully developed plan: “They have not yet understood the structure, they have not received the money, they do not have the money they have made.

SoftBank and OpenAI are willing to put up more than $15bn each for the project. The companies hope to raise a combination of equity from their existing sponsors and debt, which will be used to fund Stargate. Tokyo-based SoftBank will inject cash into Stargate, according to one of the people.

OpenAI and SoftBank declined to comment.

Altman has spent more than a year working to boost OpenAI’s access to data and computing power, a problem he says must be overcome if the company is to achieve its goal of creating AI that can outperform humans. pass many intellectual skills, replace them with workers. and pushing the boundaries of scientific research.

That means looking beyond OpenAI’s special relationship with Microsoft. The group, which has invested $13bn in OpenAI and is entitled to about half of the profits from the for-profit startup, is providing technical support to Stargate, but not capital.

Microsoft announced its $30bn AI infrastructure fund with fund manager BlackRock in September last year, and on Wednesday chief executive Satya Nadella said his company would spend $80bn on infrastructure this year. separate from the Stargate.

Altman had been talking to SoftBank chairman Masayoshi Son for two years about AI projects, including a new AI toolaccording to people familiar with the negotiations.

SoftBank also invested in OpenAI during a $6.6bn fundraising in October, which was originally valued at $157bn, and the Financial Times reported the Japanese group. planned to buy more $1.5bn of stock in the company in November. Mora and Altman began having detailed talks on Stargate in the months before this week’s announcement, according to two people with direct knowledge of the matter.

Although Altman’s infrastructure plans were in the works for more than a year, “the idea of ​​announcing them at the White House was not viable for (long)”, according to one person with project knowledge.

A person involved in the project said: “There is a real plan to do this, but the details have not been finalized. “People want to do amazing things in Trump’s first week in office.”

Stargate is incorporated in Delaware, and OpenAI, SoftBank, Oracle and MGX each take a stake in the company. The group will appoint an independent manager and board, according to people with knowledge of the projects.

The company would be split into an operations unit, tasked with building and managing data centers and led by OpenAI, and a unit responsible for raising capital, run by SoftBank, the person said. familiar with the project.

Work is already underway on the first building in Abilene, Texas.

Data center startup Crusoe has been building the facility for Oracle since June 2023. Crusoe received $3.4bn in funding from Blue Owl in October to help support its development. . Oracle is expected to buy chips worth $7bn to power the Texas site and will give that computing power to Microsoft, which will use it to power OpenAI.

Additional reporting by David Keohane in Tokyo and Stephen Morris in Davos