Is OpenAI's Stargate Project a PR stunt ?
Sam Altman wants to invest $500 billion in AI infrastructure. But where will this money come from?
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The comparisons did not take long. Announced last week at the White House, the Stargate Project has immediately drawn parallels to the Manhattan Project and the Apollo Program. This initiative aims to invest $500 billion to build massive data centers dedicated to generative AI in the US. Unlike its predecessors, it will not be funded by public money, but by private funds – whose origins remain unclear. The project will be led by a joint venture primarily owned by OpenAI and Softbank. The creator of ChatGPT will handle operational responsibilities, while the Japanese conglomerate will be responsible for financial management. Oracle and the Emirati fund MGX are also part of the initial equity funders. Nvidia, Microsoft, and Arm have been announced as technology partners.
20 data centers – The Stargate Project is the culmination of months of speculation about Sam Altman’s ambitions. The CEO of OpenAI frequently reiterates that developing general AI – capable of learning on its own – will require colossal investments, amounting to trillions of dollars. Over the past year, he has engaged in discussions with numerous potential partners. For now his company trains and runs its models exclusively on Microsoft’s Azure cloud. However OpenAI believes it lacks sufficient computing power. Last fall, The Information revealed that an agreement had been reached with Oracle to use a data center under construction in Texas. This facility will become the first one of the Stargate project. By 2029, the joint venture plans to build about twenty data centers.
“They don’t have the money” – The four partners claim they can deploy $100 billion “immediately”. “They don’t have actually the money,” Elon Musk, now a rival to OpenAI with his start-up xAI, promptly retorted. Sam Altman has denied this assertion, but the financial capacity of the Stargate Project remains uncertain. According to The Information, OpenAI and Softbank are expected to contribute $19 billion to the initial investment. While the Japanese group has the funds, this amount represents two-thirds of its cash reserves. Meanwhile, the US startup has only raised $22 billion, much of which has already been used to cover its significant losses. Furthermore, over half of the $100 billion is expected to come from external investors and debt, but no further details have been provided.
A publicity stunt? – And this is only the first phase of investments. The project plans to inject an additional $400 billion in just four years. Part of this funding might come from major Middle Eastern investors, such as the Emirati giant G42, with whom Sam Altman is said to have already held discussions, or the Saudi sovereign fund, which has previously backed Softbank’s Vision Fund. However, the US has recently introduced regulations to restrict AI access for both countries. Will they allow these nations to finance such a strategic investment? Tuesday’s announcement thus seems more like a publicity stunt than a concrete roadmap. It also appears to be a political move to win the good graces of Donald Trump, who is now linked to a project that has actually been long in the works before he took office.