(Bloomberg) — SoftBank Group Corp., OpenAI and Oracle Corp. are forming a $100 billion joint venture to fund artificial intelligence infrastructure, an effort unveiled with President Donald Trump aimed at accelerating development of the emerging technology.
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“We’re starting by investing heavily in our country at levels that no one has ever seen before,” Trump said at the White House on Tuesday.
The president was accompanied by Masayoshi Son of SoftBank, Sam Altman of OpenAI and Larry Ellison of Oracle. The joint venture will deploy $100 billion “immediately” and aims to scale up to “at least” $500 billion in AI projects, including data centers and physical campuses, Son said. Companies such as Microsoft Corp. and chipmaker Nvidia Corp. should also participate.
Trump announced a wide-ranging approach to ensuring U.S. leadership in AI, pledging to boost private sector investment by speeding up the permitting process and easing other regulations. These efforts will be led by tech industry leaders who have joined his administration, including new AI crypto czar David Sacks and Elon Musk, who has become one of the president’s closest advisors.
The president said he would use emergency declarations and executive actions to facilitate construction projects, including easing access to energy. During their speech, Trump and his leaders highlighted potential applications of AI in health care and other areas that could fuel U.S. economic growth.
“AI holds incredible promise for all of us, for every American,” Ellison said.
SoftBank shares jumped to their highest level since September in Tokyo on Wednesday, joining rallies in Nvidia, Oracle and Arm Holdings Plc. More than 400 S&P 500 stocks rose in the United States on Tuesday, with the index up nearly 1%, on expectations that Trump would unveil the new AI investment initiative.
However, the real scope of the new commitments remains unclear.
Son visited Mar-a-Lago last month to announce that SoftBank would spend $100 billion during the next presidential term, and Tuesday’s announcement was inspired by that effort, according to a person familiar with the matter. Ellison said some of the data centers envisioned for the project were already under construction, and OpenAI has also already detailed its plans to invest in AI infrastructure.
Two weeks before taking office, Trump announced a $20 billion investment by Dubai-based billionaire Hussain Sajwani in new data centers in the United States. On Monday, shortly after he was sworn in, he repealed Joe Biden’s AI guardrails and signed a series of measures aimed at boosting U.S. energy development to respond to an increase in energy demand from data centers.
But skepticism remains over whether the initiative – dubbed “Stargate” by the companies – actually represents a dramatic increase over previous plans. Son’s announcement last month raised questions about where SoftBank would get the capital to fund its initiative. The company had 3.8 trillion yen ($25 billion) in cash and equivalents on its balance sheet at the end of September.
Since winning a second term, Trump has set up shop in Silicon Valley, with prominent executives including Musk, Mark Zuckerberg, Jeff Bezos, Tim Cook and Sundar Pichai joining him at the US Capitol for his swearing-in ceremony Monday.
OpenAI’s Altman has spent months trying to build a global coalition between government and industry leaders to support increasing the supply of chips, energy and data center capacity to support the development of technology. ‘AI. The company also presented to the Biden administration the need for massive data centers that consume as much energy as entire cities.
SoftBank has already invested in OpenAI’s latest fundraising round. Sarah Friar, OpenAI’s chief financial officer, told Bloomberg News last month that she was attracted to SoftBank because the company had “access to a lot of capital” and was willing to invest that money, including “in areas such as electricity and data centers”.
In an interview on Fox News on Tuesday, Ellison noted that Stargate has been in the works “for a long time.” Construction of the first such data centers in Texas is already underway, Ellison said, and they will be turned over to Altman — and likely OpenAI — “to start training their next model.”
“The scale of this investment is obviously enormous,” Altman said. “And what I think that says about the likely advancements in technology, or at least what we all believe, is correspondingly huge.”
Cloud infrastructure providers like Microsoft, Amazon.com Inc. and Oracle have been scrambling to expand their computing capacity by building new data centers. Oracle has already committed billions to build new data centers: The company is expected to double its capital spending this fiscal year to more than $14 billion, largely thanks to these projects.
–With help from Jackie Davalos and Rachel Metz.
(Updates with more of the event from the fourth paragraph)
