OpenAI and Softbank have unveiled an ambitious $500 billion initiative to construct a network of AI data centres, known as The Stargate Project. Announced at a White House press conference, the project is backed by prominent figures such as Masayoshi Son, Sam Altman, and Larry Ellison, alongside President Donald Trump. The initiative will establish cutting-edge AI infrastructure across the United States, with the initial buildout commencing in Texas.
The Stargate Project is supported by a consortium of tech giants, including Arm, Microsoft, Nvidia, Oracle, and OpenAI. These companies are not only providing technological expertise but also significant financial backing. Oracle, Nvidia, and OpenAI are set to collaborate closely in the construction and operation of the new computing systems, ensuring that the infrastructure meets the demands of advanced AI applications.
Microsoft has reaffirmed its commitment to its partnership with OpenAI, extending key elements of their agreement through 2030. This includes access to OpenAI’s intellectual property, revenue-sharing arrangements, and exclusivity on OpenAI’s APIs. However, the exclusivity on new capacity is being adjusted, granting Microsoft the right of first refusal on any new capacity built by OpenAI. This strategic move underscores Microsoft’s pivotal role in supporting OpenAI’s growth and innovation.
The announcement of The Stargate Project was marked by political undertones, with Son and Altman attributing the project’s fruition to Trump’s election victory. Clearly, the new administration is pro-big tech, and big tech was quick to acknowledge this.
As for the 100,000 jobs the project is supposed to create? Some construction jobs will be created as the data centers are built, but many more (millions more) will be created as the data centers come online. We’ve never had a compute cloud like this — there’s literally no way to calculate the economic impact of this amount of AI compute. It will be massive.
There are many tech skeptics, and it has become fashionable to denigrate and vilify big tech. To me, The Stargate Project is the first step in securing the future of the U.S. economy as well as our digital and cyber security. Every business will benefit from the power and promise of AI, and – like it or not, believe it or not – warfare will be dominated by AI. Today, the United States has a clear lead. The Stargate Project will help ensure it stays that way.
As always your thoughts and comments are both welcome and encouraged. -s
P.S. Last Saturday, we had about a hundred gifted engineers break into teams to build prototype multi-agent AI systems. On Sunday, a similarly-sized group spent the day developing systems to empower autonomous drones. The most amazing thing about a well-run hackathon is watching highly motivated teams of brilliant engineers achieve (in a single day) what might take some companies weeks or months. If you've got an idea you'd like to realize as a proof of concept or MVP, just reply to this email. We do these almost every weekend.
Shelly Palmer is the Professor of Advanced Media in Residence at Syracuse University’s S.I. Newhouse School of Public Communications and CEO of The Palmer Group, a consulting practice that helps Fortune 500 companies with technology, media and marketing. Named LinkedIn’s “Top Voice in Technology,” he covers tech and business for Good Day New York, is a regular commentator on CNN and writes a popular daily business blog. He's a bestselling author, and the creator of the popular, free online course, Generative AI for Execs. Follow @shellypalmer or visit shellypalmer.com.
