On Jan. 21, President Donald Trump announced a $500 billion investment in an artificial intelligence (AI) infrastructure project, dubbed “Stargate” involving some of the nation’s top tech companies including OpenAI, Oracle and SoftBank.
The move seeks to position the United States at the forefront of AI development and is expected to immediately create upwards of 100,000 jobs. Trump described Stargate as “the largest AI infrastructure project in history.’
Initially, the project will be funded with $100 billion, with plans to scale up the investment to $500 billion over the next four years. The funds will go directly towards building data centers and other infrastructure necessary for the development and application of AI technologies.
Present at Trump’s announcement were tech leaders Sam Altman of OpenAI, Larry Ellison, co-founder of Oracle and SoftBank CEO, Masayoshi Son, signalling their commitment to the project.
“Together these world-leading technology giants are announcing the formation of Stargate,” Trump said.
Success
You are now signed up for our newsletter
Success
Check your email to complete sign up
The first data center is expected to break ground in Texas, with plans to expand to other states in the near future.
READ MORE:
- Trump Signs Sweeping Executive Orders on First Day, Pardons 1,500 Jan. 6 ‘Hostages’
- US Supreme Court Signals it Will Uphold TikTok Ban: Platform Faces Potential Shutdown This Sunday
A strategic advantage
With a focus on domestic AI infrastructure, the U.S. aims to reduce reliance on foreign technology and secure its position in global AI leadership, while giving the country a distinct strategic advantage.
The investment is expected to stimulate the economy through job creation and technological advancement, and echoes promises made in Trump’s first term to invest in American infrastructure.
Speaking at the announcement, Altman said that he was “thrilled” to be part of the project.
“The fact that we get to do this in the United States is just wonderful,” he said. “I believe that as this technology progresses, we will see diseases get cured at an unprecedented rate.”
Ellison said Stargate is a “very exciting program for Oracle to be a part of.”
As part of the announcement, Trump also said that he revoked a Biden administration executive order that pushed for greater transparency from large companies developing AI.
NVIDIA, OpenAI and Microsoft have been the subject of an investigation by the Department of Justice and Federal Trade Commission which has cooled the AI market, however with Trump’s announcement and his anti-regulatory stance, it’s expected the industry will see a massive surge.
READ MORE:
- The Silent Crisis: Pension Woes Mount in China Amid Sharp Decline in Elderly Care Facilities
- Communist China Aims for a ‘Fatal Blow’ Against Falun Gong on US Soil
Markets react
Following the announcement stock markets showed a positive reaction, particularly among companies involved in the project.
Shares of Oracle jumped by around seven to eight percent in normal trading hours, with further gains in after-hours trading. This surge is attributed directly to the company’s involvement in Stargate.
NVIDIA Corporation also saw a sizable bump in its stock price, rising between two and four percent in normal trading. This was driven by anticipation that the company’s components will be sought after for the construction of several data centers.
Following the announcement, SoftBank also enjoyed a bump in its stock price with it soaring more than eight percent in Asian markets and contributing to a solid performance by the Nikkei index.
The optimism was reflected in other tech stocks including Dell, Microsoft and Palantir which all saw gains.
However, not all tech companies enjoyed the boost. Shares for Tesla Inc fell, with speculators claiming it was due to the company not being directly involved in the project and while Microsoft Corporation saw a modest bump, there was a nuanced reaction to the announcement because in the deal the company lost its exclusive cloud contract with OpenAI.
