Trump announces Stargate AI investment plan worth $500B. Where will all that money go?

President Donald Trump joined some of the most influential, and deep-pocketed, leaders from the emerging artificial intelligence industry to unveil a private sector plan aiming to invest $500 billion in U.S.-based AI infrastructure projects over the next four years.

OpenAI CEO Sam Altman, Oracle founder Larry Ellison and SoftBank CEO Masayoshi Son gathered with Trump at a White House press conference Tuesday to announce the Stargate Project, a privately funded effort to invest $500 billion in artificial intelligence infrastructure, including massive data centers and new energy systems to drive that power-hungry technology, over the next four years.

Trump said the effort will create 100,000 new U.S. jobs on the way to building “the physical and virtual infrastructure to power the next generation of AI.”

Stargate brings together some of the biggest global players in tech, including Oracle, which operates over 150 data centers around the world; Japan-based SoftBank, which manages the world’s largest technology-focused venture investment fund; and artificial intelligence software developer OpenAI, a leader in AI tools and the company behind natural language chatbot ChatGPT and image generator DALL-E.

In its own announcement posted on Tuesday, OpenAI noted MGX, a $100 billion investment arm of the United Arab Emirates sovereign wealth fund is an equity partner in Stargate along with OpenAI, Oracle and SoftBank. Other partners include Microsoft, a major investor in OpenAI, along with advanced microchip makers Nvidia and Arm.

Stargate principals say they’ll make an initial $100 billion investment, currently underway with 10 data centers under construction near Abilene, Texas, and are “evaluating potential sites across the country for more campuses as we finalize definitive agreements” and plans to invest up to an additional $400 billion over the course of Trump’s second term.

According to OpenAI’s announcement, SoftBank and OpenAI are the lead partners for Stargate, with SoftBank having financial responsibility and OpenAI having operational responsibility. Son will take on the role of Stargate chairman while Arm, Microsoft, NVIDIA, Oracle and OpenAI are the key initial technology partners in the effort.

Hours after the press event, Trump insider Elon Musk took to his own social media platform to critique the Stargate plan, alleging in a response to a posting on X from OpenAI that the project participants “don’t actually have the money” to fund the plans. In a follow-up tweet, Musk wrote that “SoftBank has well under $10B secured. I have that on good authority.”

Altman added his own response to Musk’s criticism on Wednesday morning, discounting the claim about adequate financial resources and inviting Musk to visit the site of the Texas data center construction project.

While Son noted at Tuesday’s press event that the partnership deal had just been signed, plans for the Stargate Program were revealed last March and first reported by tech news website The Information.

Just hours after taking the oath of office Monday, Trump rescinded a 2023 edict from former President Joe Biden that had aimed to create new safety rules for emerging artificial intelligence tools. Biden’s wide-ranging executive order set the stage for regulatory oversight on emerging artificial intelligence technology and building bulwarks against consumer privacy invasions, discrimination and the dissemination of false or misleading information generated by AI-powered tools.

At Tuesday’s press conference, Ellison noted the Abilene data centers will be around 500,000 square feet per unit when complete. A data center of that scale can house thousands of servers and comes with a massive power requirement. Trump and Stargate principals noted that the planned infrastructure investments will include considerable outlays for new power generation sources.

A 2024 Goldman Sachs report details the computing necessities of AI far outstrip other digital processing and notes that, on average, a ChatGPT query needs nearly 10 times as much electricity to process as a Google search. Goldman analysts said that at the time the report was issued, AI computational needs were consuming 1% to 2% of global power output but are on pace to increase by 160% by 2030.

Could Utah be a target of new Stargate investments?

According to data from Baxtel, Utah currently has 47 data center facilities that occupy over 6.3 million square feet and consume nearly 600 megawatts of power. While the biggest single facility is the National Security Agency’s 1.5 million square-foot data center in Saratoga Springs, Facebook owner Meta is the biggest single operator with seven data centers in the state, per Baxtel data.

A report issued last November by Power Engineering notes Utah is poised to be one of the fastest-growing data center markets in the country and estimates near-term growth in the Salt Lake region of 699%, second only to Las Vegas/Reno, Nevada.

That growth estimate, according to the report, will be driven by “Utah’s ‘attractive’ tax incentives, affordable real estate and a growing tech presence.”

Tax breaks are a powerful carrot

While Stargate has yet to reveal details about what areas of the country are of interest outside the Texas-based projects, tax incentives helped propel Meta to go big on its own data center investments in Utah.

Before it became known as Meta, Facebook unveiled its Eagle Mountain data center project in May 2018 after rumors and speculation about a mysterious big tech project in the area swirled for months. The depth and breadth of local and state tax incentives provided as a lure for the company were also clarified at that time, and they are unprecedented.

If all five phases of the data center project are completed in the next few decades, Facebook is set to harvest a potential $750 million in taxpayer subsidies along the way.

Phase 2, announced in late 2019, added 500,000 square feet of additional facilities to the first phase and pushed the capital investment to $1 billion, according to the company.

While Facebook unveiled the third phase of the project in 2022, the open-ended incentive agreements extend public benefits well beyond the first three phases and could land the company hundreds of millions in additional tax relief over the next four decades.

In addition to its capital costs, Facebook invested about $150 million in infrastructure improvements, including bringing power to the 500-acre site from a nearby high-capacity power line corridor, extending sewer and water service, bringing in telecommunication lines and improving roads.

That infrastructure investment is expected to be equalized by the Phase 1 tax benefits of $150 million over 20 years. That tax break gives Facebook 100% tax relief on personal property taxes and 80% relief on real property taxes for a term of 40 years for four of the five taxing entities it’s beholden to.