Dive Brief:
- President Donald Trump announced a $500 billion, four-year effort to boost national AI infrastructure, speaking during a Tuesday conference. Oracle, OpenAI, SoftBank and MGX will jointly deploy an initial $100 billion toward the effort.
- The venture will bring together several technology providers, including Nvidia, Microsoft and Arm. An initial set of 10 data centers are already under construction, Oracle CTO and Chairman Larry Ellison said during the briefing.
- "Beginning immediately, Stargate will be building the physical and virtual infrastructure to power the next generation of advancements in AI, and this will include the construction of colossal data centers," Trump said during the announcement.
Dive Insight:
The Stargate venture addresses a common pain point of enterprise AI developers: a tightening supply of high-capacity computing infrastructure to power development.
The effort aligns with the Trump administration's stated intentions to support AI development in the U.S. Earlier this week, the administration rescinded a Biden executive order aimed at placing safety guardrails around AI development, a move analysts say is designed to reduce federal regulation.
The Stargate announcement comes in the wake of a major sign of Big Tech support for President Trump. Top executives from Google, Amazon and Meta — each developing AI efforts — were in attendance during the presidential inauguration Monday.
As part of the new joint venture, Microsoft announced changes to its partnership with OpenAI in a Wednesday blog post.
"OpenAI recently made a new, large Azure commitment that will continue to support all OpenAI products as well as training," the company said. "This new agreement also includes changes to the exclusivity on new capacity, moving to a model where Microsoft has a right of first refusal."
The AI infrastructure project aligns with the administration's priorities around sovereign AI, according to Lydia Clougherty Jones, senior director analyst at Gartner.
"The announcement of Stargate signals the U.S.’s continued commitment to maintaining its global leadership status for AI development and investment," said Clougherty Jones in a Wednesday email. "It also signals the US federal government’s continued dedication to solving the energy infrastructure challenges to AI development to advance national security, safety, economic competitiveness, and technological advancement."
Demand for generative AI hardware upgrades will push software, data center and devices spending to grow by double-digits in 2025, according to Gartner projections.
