OpenAI unveils $500 billion Stargate project to emancipate its overreliance on Microsoft's infrastructure — as Elon Musk questions investor liquidity

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President Trump reaffirms commitment to OpenAI's $500 billion Stargate project, as Elon Musk weighs in with his thoughts.

The OpenAI logo appears on the screen of a smartphone.
(Image credit: Getty Images | NurPhoto)

OpenAI CEO Sam Altman, SoftBank CEO Masayoshi Son, and President Donald J. Trump alongside Oracle and MGX recently announced a project worth $500 billion dubbed Stargate. The colossal investment will be used to build massive data centers for AI advances in the United States.

The ChatGPT maker indicated that it will deploy up to $100 billion towards the project, potentially creating hundreds of thousands of American jobs while bolstering the economy. SoftBank and OpenAI are the leading partners of the project, with the former handling the finances and the latter taking the operational responsibility.

Related: SoftBank's missed opportunity to invest in OpenAI

Last year, a report emerged claiming Microsoft and OpenAI were planning to invest up to $100 billion in Stargate to free themselves from the shackles and overreliance on NVIDIA for AI chips. But things are a tad different now, with Microsoft missing from the fold and the project being more about data centers to facilitate computational power than developing AI chips.

According to President Trump:

"What we want to do is we want to keep it in this country. China is a competitor, others are competitors. We want to be in this country, and we're making it available. I'm gonna help a lot through emergency declarations, because we have an emergency, we have to get this stuff built. So they have to produce a lot of electricity. And we'll make it possible for them to get this production done easily, at their own plants if they want."

Oracle Executive Chairman Larry Ellison indicated that the first data centers are already under construction in Texas. Perhaps more importantly, the executive says the $500 billion project will facilitate the construction of the largest computer ever built. It will also lead to cancer vaccines, personalized medication, and prevention of pandemics like COVID-19. Sam Altman reiterated Ellison's sentiments by indicating that diseases will start getting cured at an "unprecedented rate" as the project advances.

Where does Microsoft's deal with OpenAI stand?

Microsoft isn't the only partner with OpenAI on The Stargate Project. (Image credit: Bullfrag)

As you may know, Microsoft is OpenAI's largest investor, with a deal making it the ChatGPT maker's exclusive cloud computing partner for its sophisticated AI advances. Last year, OpenAI blatantly indicated that Microsoft is not meeting its cloud computing needs and that it would be its fault if a competitor hits the coveted AGI benchmark first.

Following the announcement of OpenAI's $500 billion Stargate project, Microsoft announced that its partnership with the ChatGPT maker is evolving as we transition to the next phase of AI. Microsoft indicated that key elements of the partnership will remain intact through 2030, including:

  • Microsoft has rights to OpenAI IP (inclusive of model and infrastructure) for use within our products like Copilot. This means our customers have access to the best model for their needs.
  • The OpenAI API is exclusive to Azure, runs on Azure and is also available through the Azure OpenAI Service. This agreement means customers benefit from having access to leading models on Microsoft platforms and direct from OpenAI.
  • Microsoft and OpenAI have revenue sharing agreements that flow both ways, ensuring that both companies benefit from increased use of new and existing models.
  • Microsoft remains a major investor in OpenAI, providing funding and capacity to support their advancements and, in turn, benefiting from their growth in valuation.

Elon Musk's lethal jabs keep rolling — but do they have merit?

Elon Musk has, as is traditional, weighed in. (Image credit: Getty Images | Marc Piasecki)

As expected, billionaire and Tesla CEO Elon Musk critiqued the $500 billion Stargate announcement. According to Musk, the partners involved in the massive project don't have the money to fund it. "SoftBank has well under $10 billion secured," claimed Musk. "I have that on good authority."

According to SoftBank CEO Masayoshi Son, Stargate will expedite the process of building AGI, which is expected to be "coming very, very soon." The executive explained that the project will help bolster AI advances, potentially scaling superintelligence heights.

Sam Altman recently dismissed AGI deployment reports, indicating that the company has neither built nor plans to ship the benchmark next month, urging users to lower their expectations 100x while promising a lot of exciting stuff. However, the executive claimed that the OpenAI team knows how to build AGI, potentially shifting its focus to superintelligence.

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Kevin Okemwa
Kevin Okemwa
Contributor

Kevin Okemwa is a seasoned tech journalist based in Nairobi, Kenya with lots of experience covering the latest trends and developments in the industry at Windows Central. With a passion for innovation and a keen eye for detail, he has written for leading publications such as OnMSFT, MakeUseOf, and Windows Report, providing insightful analysis and breaking news on everything revolving around the Microsoft ecosystem. You'll also catch him occasionally contributing at iMore about Apple and AI. While AFK and not busy following the ever-emerging trends in tech, you can find him exploring the world or listening to music.

1 Comment Comment from the forums
  • fjtorres5591
    You do realize MS is part of the STARGATE project, right?

    And the $500 billion is the *projected* lifetime investment of the project. The only guarantee is $100B from Softbank, Microsoft, Meta, Oracle and others.

    MS alone is projecting $100B for their data center investment so this is likely not added spend but only part of it. Ditto for Oracle, and the others. With "others" being key: in today's global economy, the US is already sucking investment cash from all over leaving little for other stressed economies looking to do their own AI investments. Brain drain will follow.

    There is both less to this than the media makes of it, and more, but in other areas.
    If anything, it reminds me of the Reagan era SDI effort, except the money isn't coming from the feds. Other than grandstanding, the prez is greasing the skids by ensuring minimal red tape interference.

    But the grandstanding serves a geopolitical purpose; it sets a target for China to go after, which they will with their usual money printing tactics. At a time their economy is under stress with an unholy mix of inflation and deflation on top of demographic decline. They'll do it but they won't enjoy it.

    A tangled web is weaving.
    Reply