Trump unveils Stargate AI investment during infrastructure address
President Donald Trump announced Stargate, a $500 billion investment in AI infrastructure. His attention then turned to TikTok ownership and tariffs.
This story has been updated to include video.
President Donald Trump has announced an up to $500 billion investment in private sector artificial intelligence infrastructure, which is kicking off with data centers in Texas.
Executives from OpenAI, Softbank and Austin-based Oracle will invest $100 billion initially and up to $500 billion in a joint venture called Stargate over the next four years. Oracle’s Chief Technology Officer Larry Ellison joined Softbank CEO Masayoshi Son and OpenAI CEO Sam Altman at the White House for the Tuesday announcement.
Trump said Stargate will build “the physical and virtual infrastructure to power the next generation of AI.”
“China is a competitor; others are competitors. We want to be in this country, and we’re making it available,” Trump said. “I’m going to 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.”
Ellison announced during Tuesday’s briefing that 10 data centers for the project are already under construction in Texas, including one that spans 1 million square feet.
“There are 10 buildings currently being built, but that will expand to 20 and other locations beyond the Abilene location, which is our first location,” Ellison said
CBS News previously reported that Stargate will begin with a data center project in Texas and later expand to other states.
“AI holds incredible promise for all of us, for every American,” Ellison said.
Trump claimed that Stargate would create “over 100,000 American jobs almost immediately.” Further details about Stargate and the broader partnership are not immediately known. Other investors are also expected to join the venture.
Oracle is one of the largest data center operators in the country. Oracle, although based in Austin, announced last April plans to relocate its headquarters to Nashville.
Softbank, a Japanese investment holding company, has the financial backing to fund AI infrastructure expansion. Altman had reportedly met with Son to discuss investment in new semiconductor plants to build AI chips. Altman has expressed the need for the federal government to ensure it stays ahead of China in the AI arms race by supporting infrastructure.
“I think this will be the most important project of this era,” Altman said.
Texas has seen increased development in data centers in recent years, with a report from commercial services firm CBRE finding that Austin and San Antonio’s combined under-construction data center activity more than quadrupled in the first half of 2024 compared with the previous year. Dallas-Fort Worth has the second-largest data center market in the country behind northern Virginia.
Ken Fleischmann, professor at the University of Texas School of Information, told the American-Statesman that an investment this large into AI infrastructure could greatly affect Texas — especially the city of Austin.
“Here with the ‘Silicon Hills,’ here in Austin, we have emerged as one of the primary sites of AI innovation nationwide and worldwide,” Fleischmann said. “This kind of investment could further strengthen AI innovation here in Austin. … For economic vitality, it could be an extremely good thing for Austin and Texas’ broader national profile and reputation.”
How is AI being regulated?
Fleischmann, who also founded Good Systems: Ethical AI at UT Austin, said the most important piece of this is regulations.
“Far too often with technology in general, and AI in particular, we’ve been in a very reactive position,” Fleischmann said. “This has certainly happened with social media, where the technology led and we had to pick up the pieces in terms of all of the externalities and consequences that resulted. So I think it’s important with AI that we try to be as proactive as possible.”
On the first day of his presidency, Trump revoked Joe Biden’s 2023 executive order that established guidelines for generative AI.
Generative AI can create content, like text, photos and videos, in response to open-ended prompts, which differs from traditional AI which is designed to perform specific tasks.
Biden’s 2023 order, which came after lawmakers failed to pass legislation establishing guardrails for AI development, required developers to share results of safety tests with the federal government for AI systems that pose risks to national security, the economy, public health or safety. The order also directed agencies to set standards for testing and to address chemical, biological, radiological, nuclear and cybersecurity risks. The Republican Party had pushed to repeal the order, saying it hinders AI innovation.
Biden signed an additional AI executive order Jan. 14, seeking to accelerate infrastructure needed for advanced AI operations in the U.S. Trump has not repealed this order.
To Fleischmann, states shouldn’t wait for Congress to pass sweeping AI regulations.
“In the meantime, it’s very sensible and reasonable for Texas and other states to pursue what we can do here in Texas to come up with laws that are appropriate for Texans,” he said. “And hopefully, if enough states are individually regulating AI, this would be a bottom-up approach that the federal government then could learn from advances in the states.”
State Rep. Giovanni Capriglione, R-Southlake, filed a much-anticipated AI regulatory bill, known as the proposed Texas Responsible Artificial Intelligence Governance Act, in December.
The act would establish regulations, guidelines and obligations for the development, use and distribution of “high-risk AI systems.”
Major takeaways from Capriglione’s bill:
- Require companies to disclose if they are using AI systems and explain how it is being used.
- Establish guidelines to prevent bias, discrimination and the misuse of AI.
- Create safeguards to protect personal data used in AI systems.
- Encourage education and training programs to help Texas workers better understand an AI-driven economy.
- Establish free speech protections and censorship preventions of “lawful political discourse.”
Data centers in Central Texas
Earlier this month, Trump announced that Dubai developer DAMAC Properties is planning to invest at least $20 billion “over a very short period of time” in data centers across the country, including in Texas.
At the time of that announcement, a Texas-based expert on electric system reliability told the Statesman that the greater Austin area could not support that much data development in the next five or so years.
“Although they can build a data center in a few months, we can’t build new generation and new transmission fast enough to serve that data center as quickly as they can build,” said Alison Silverstein, a former board member for the American Council for an Energy Efficient Economy.
For perspective, the Electric Power Research Institute reported that ChatGPT requests and similar AI inquiries are estimated to need 10 times the electricity that traditional Google searches require.
Fleischmann said he believes the blackouts during the February 2021 winter storm showed lots of gaps in and anxieties about Texas’ power grid capabilities.
Mass AI infrastructure investment and the construction of data centers in Central Texas could be incredibly beneficial for the state and especially Austin.
However, Fleischmann thinks more conversations and care needs to be taken so Austinites and Texans aren’t blindsided by their overtaking of energy systems.
“We would have data centers that are serving the world in terms of generative AI and then we have Austin residents. That’s a difficult trade-off,” Fleischmann said. “Certainly, there would be associated job opportunities for constructing and maintaining those data centers, and it would have the potential to bring more high-tech jobs here to Austin. But I think we need to think about the potential environmental impacts as well as the potential implications for emergency management.”