By Steve Holland
(Reuters) -U.S. President Donald Trump on Tuesday announced private sector investment of up to $500 billion to fund artificial intelligence infrastructure.
OpenAI, SoftBank (TYO:9984) and Oracle (NYSE:ORCL) plan a Texas-based joint venture called Stargate, and have committed $100 billion initially and then up to $500 billion to Stargate over the next four years.
SoftBank CEO Masayoshi Son, OpenAI’s Sam Altman and Oracle’s Larry Ellison joined Trump at the White House for the launch.
The announcement on Trump’s second day in office follows the rolling back of former President Joe Biden’s executive order on AI, that was intended to reduce the risks artificial intelligence poses to consumers, workers and national security.
AI requires enormous computing power, pushing demand for specialized data centers that enable tech companies to link thousands of chips together in clusters.
“They have to produce a lot of electricity, and we’ll make it possible for them to get that production done very easily at their own plants if they want,” Trump said.
As U.S. power consumption rises from AI data centers and the electrification of buildings and transportation, about half of the country is at increased risk of power supply shortfalls in the next decade, the North American Electric (NASDAQ:AEP) Reliability Corporation said in December.
As a candidate in 2016, Trump promised to push a $1 trillion infrastructure bill through Congress but did not. He talked about the topic often during his first term as president from 2017 to 2021, but never delivered on a large investment, and “Infrastructure Week” became a punchline.
Oracle shares were up 7% on initial report of the project earlier in the day. Nvidia (NASDAQ:NVDA), Arm Holdings (NASDAQ:ARM) and Dell (NYSE:DELL) shares also rose.
It was not immediately clear whether the announcement was an update to a previously reported venture.
In March 2024, The Information, a technology news website, reported OpenAI and Microsoft (NASDAQ:MSFT) were working on plans for a $100 billion data center project that would include an artificial intelligence supercomputer also called “Stargate” set to launch in 2028.
Investment in AI has surged since OpenAI launched ChatGPT in 2022, as companies across sectors seek to integrate artificial intelligence into their products and services.