Trump announces $100 billion AI investment plan

SoftBank, OpenAI, and Oracle are forming a $100 billion joint venture to fund artificial intelligence infrastructure, with President Donald Trump aiming to accelerate the development of new technology.

“We are starting with a tremendous investment in our country at levels that no one has ever seen before,” Trump said at the White House on Tuesday.

The president was joined by SoftBank’s Masayoshi Son, OpenAI’s Sam Altman, and Oracle’s Larry Ellison. Son, who will chair the venture called Stargate, stated that the joint venture will utilize $100 billion immediately and aims to raise at least $500 billion to develop new infrastructure, including data centers and physical campuses for OpenAI.

SoftBank said the initial capital will come from SoftBank, OpenAI, Oracle, and Abu Dhabi state investor MGX, and the first computing system will begin to be built in Texas.

Stargate aims to increase capacity to train and run new artificial intelligence models. While SoftBank and OpenAI will be the leading partners of the venture, SoftBank will be responsible for financing, and OpenAI will oversee operations. Along with Arm Holdings, Microsoft, and Nvidia, Oracle and OpenAI will also provide technology.

Trump added that Stargate will “build the physical and virtual infrastructure to power the next generation of advances in artificial intelligence, which will include the construction of massive data centers.” The president said Stargate would create 100,000 jobs “almost immediately” and keep “the future of technology” in America.

Presidential orders to be used for easy access to energy

Trump has signaled a wide-ranging approach to ensuring US leadership in AI, with promises to encourage private sector investment by speeding up the permitting process and easing other regulations. These efforts will be driven by tech sector leaders joining Trump’s administration, including AI-crypto giant David Sacks, a newcomer, and Elon Musk, who has emerged as one of the president’s closest advisers.

SoftBank shares surged 9.7% in Tokyo on Wednesday, the biggest intraday gain since August, joining rallies in shares of Nvidia, Oracle, and Arm. More than 400 shares in the S&P 500 rose during US trading on Tuesday in anticipation of Trump’s announcement of his new artificial intelligence investment push, with the benchmark up almost 1%.

The president said he would use emergency declarations and presidential orders to help facilitate construction projects, including easier access to energy.

Dubai to receive $20 billion investment

During their speeches, Trump and the executives emphasized the potential applications of AI in healthcare and other areas to support US economic growth. “AI holds incredible promise for all of us, for every American,” Oracle’s Ellison said.

Two weeks before taking office, Trump announced that Dubai-based billionaire Hussain Sajwani would invest $20 billion in new data centers across the US. On Monday, shortly after he was sworn in, he canceled the artificial intelligence protection measures put in place by Joe Biden and signed a series of measures to boost US energy development to meet the increase in energy demand from data centers.

However, skepticism remains about whether the initiative, dubbed Stargate by companies, represents a dramatic increase compared to previous plans.

Where will the money come from?

For example, Son’s statements last month raised questions about where SoftBank would find the capital to finance this initiative. Bloomberg had previously reported that SoftBank could utilize hyperscalers in a project financing plan and raise tens of billions to hundreds of billions of dollars. The Japanese technology investor had ¥3.8 trillion ($25 billion) in cash and equivalents on its balance sheet at the end of September.

Speaking to Bloomberg, Astris Advisory analyst Kirk Boodry suggested that SoftBank may need to contribute between $25 billion and $30 billion for its share in the project. “We think they will be able to attract limited partners—possibly Middle Eastern investors, as they did with the Vision Fund—and asset sales will likely be on the agenda. SoftBank can afford it,” he stated.

OpenAI’s Altman has spent months trying to build a global coalition among government and industry leaders to support the expansion of chip, energy, and data center capacity to support the development of artificial intelligence. The company also presented to the Biden administration on the need for massive data centers that use as much power as entire cities.

Trump halts more than $300 billion in green infrastructure funding

Within hours of his inauguration on Monday, Trump signed several executive orders reversing Biden’s policies, including a decree halting federal payments to manufacturers and infrastructure developers. According to a Financial Times analysis of the Department of Energy’s (DoE) loan portfolio, the affected funds were provided under two of Biden’s key legislative achievements—the Deficit Reduction Act and the bipartisan infrastructure bill. These include approximately $50 billion in DoE loans already approved and another $280 billion in loan requests currently under review.

“All agencies shall immediately stop payment of funds appropriated through the legislation,” the Trump administration stated in an executive order titled Free American Energy. Payments now at risk include a $9 billion conditional loan to Michigan-based DTE Energy and another $3.5 billion loan to Oregon-based PacifiCorp.

The 2021 infrastructure bill allocated $1.2 trillion to improve the nation’s transportation system, while the Inflation Reduction Act (IRA) provided $370 billion in tax cuts, grants, and loans. Both programs were designed to significantly expand the Department of Energy’s Office of Loan Programs, which is responsible for distributing $400 billion to companies. Investors expressed concern that Trump’s actions could freeze $300 billion in future federal funding, primarily from infrastructure legislation.