OpenAI, the creator of ChatGPT, is collaborating with a major U.S. tech company, a Japanese investment firm, and a sovereign wealth fund from the United Arab Emirates to establish a vast $500 billion artificial intelligence (AI) infrastructure in the United States. The project, named The Stargate Project, was unveiled at the White House by President Donald Trump, who hailed it as “the largest AI infrastructure project by far in history” and emphasized its importance for maintaining “the future of technology” within the U.S.
Despite the project’s ambitious claims, Elon Musk, a prominent adviser to Trump and a rival to OpenAI CEO Sam Altman, raised doubts about its financial backing. On Wednesday, Musk questioned the project’s funding, stating that it “does not actually have the money” it claims to invest.
AI investment is surging, leading to an increasing demand for new data centers. At the same time, the environmental concerns surrounding the immense amounts of water and power required by these facilities have also sparked debate.
The Stargate Project is a joint venture between OpenAI, Oracle, Japan’s SoftBank, led by Masayoshi Son, and MGX, the technology investment arm of the United Arab Emirates government. The companies involved announced that the new venture, which was in the works before Trump’s administration, has secured $100 billion in immediate funding, with the remaining amount to be provided over the next four years. The project is expected to create approximately 100,000 jobs.
Elon Musk, who owns the platform X (formerly known as Twitter), expressed his skepticism about the funding on a post in which OpenAI detailed the venture. Musk wrote, “They don’t actually have the money.” He further claimed, “SoftBank has well under $10B secured. I have that on good authority,” although he did not provide specifics or evidence to support his statement.
In response, Sam Altman, CEO of OpenAI, denied Musk’s claims, stating, “Wrong, as you surely know.” Altman then invited Musk to visit the project’s first site, which is already under construction, and added, “This is great for the country. I realize what is great for the country isn’t always what’s optimal for your companies, but in your new role, I hope you’ll mostly put the US first.”
Musk is playing a central role in advising Trump on government efficiency and is tasked with overseeing federal spending. However, tensions between Musk and Altman have been evident since Musk’s departure from OpenAI’s board in 2018, after which he launched his own AI startup.
A source familiar with The Stargate Project stated that it was unclear where Musk had obtained his information and reaffirmed that the venture is well-positioned to deploy $100 billion. The project’s first data center is currently under construction in Texas, as confirmed by Oracle’s Chief Technology Officer, Larry Ellison. Additional data centers are planned for other U.S. locations.
During the announcement at the White House, Altman expressed optimism about the venture’s significance, calling it “the most important project of this era.” He also acknowledged President Trump’s role in the project, stating, “We wouldn’t be able to do this without you, Mr. President,” although the initiative had begun before Trump took office.
The U.S. has long been the global leader in AI investment, far outspending other countries in this field. Major U.S. tech companies have been heavily investing in AI-related data centers over the past year. For instance, Microsoft, one of OpenAI’s main backers, recently revealed plans to invest $80 billion in AI-focused data centers this year alone. Additionally, Microsoft is part of a $100 billion venture involving BlackRock and MGX, which focuses on AI data center investments.
Amazon has also been making significant investments in data centers, with two projects valued at around $10 billion each announced within the last two months.
A McKinsey report last year predicted that global demand for data center capacity would more than triple by 2030, growing at an annual rate of 19% to 27%. To meet this demand, the consultancy estimated that developers would need to construct at least double the capacity built since 2000 by 2030. However, analysts have warned that various challenges, such as power limitations, land constraints, and permitting delays, could hinder progress.
Trump, who has previously taken credit for promoting business investment, promised that he would take steps to support the industry. He declared, “I’m going to help a lot through emergency declarations because we have an emergency,” underlining the importance of keeping AI development in the U.S. The President added that his administration would ensure the project’s success by making it “possible for them to get that production done very easily.”
The growing demand for AI infrastructure has been a key topic for OpenAI, which has long called for more investment in data centers. The Information, a technology news website, first reported on The Stargate Project in March of the previous year.
Other partners involved in the project include the British chipmaker Arm, U.S. chipmaker Nvidia, and Microsoft, which already collaborates with OpenAI.
Alongside Musk’s concerns about the funding for the Stargate Project, there are broader concerns about the environmental impact of the data centers, particularly their massive energy consumption and the role of foreign investors in the U.S. AI industry.
In one of his final acts as President, Joe Biden introduced rules aimed at restricting exports of AI-related chips to several countries, arguing that this move would help the U.S. maintain control over the industry. Biden also issued executive orders related to the development of data centers on government land, emphasizing the role of clean energy in powering these facilities.
As the U.S. continues to be at the forefront of AI investment, The Stargate Project represents one of the largest ventures aimed at shaping the future of artificial intelligence and the infrastructure needed to support it. Whether it can meet the ambitious goals set forth by its creators remains to be seen, as the industry grapples with significant challenges, from financing concerns to environmental implications.