Inside Trump’s USD 500 bn AI project Stargate

Inside Trump’s USD 500 bn AI project: US President Donald Trump announced on Tuesday that the US is embarking on Stargate, a joint venture to build large-scale data centers nationwide, with OpenAI, SoftBank, and Oracle committing USD 500 bn to the project labeled by Trump as “largest AI infrastructure project in history,” CNN reports.

Who’s doing what? SoftBank will oversee financial aspects, with its own Masayoshi Son chairing the venture, while OpenAI will handle day-to-day operations.

The project’s already underway: Stargate’s first 10 data centers are already under construction in Texas comprising 500k sq ft each, Reuters reported, citing statements by Oracle Chairman Larry Ellison at a press conference. Data centers built by Stargate will be used to power advanced AI applications, like artificial general intelligence and electronic health record analysis.

Meet the investors: A portion of the initial USD 100 bn slated to be deployed immediately will be funded by third-party debt rather than equity, according to Axios. SoftBank will raise the debt, with Softbank and Sam Altman’s OpenAI being the largest equity investors in the initial USD 100 bn. UAE tech-focused investor MGX and Oracle have also contributed funding. The potential remaining investments estimated at USD 400 bn is expected to include current and new investors, as well as lenders.

A race against China: Trump emphasized the urgency of building AI infrastructure and keeping it “in this country” to maintain US dominance over competitors such as China, according to CBS. The newly-inaugurated president pledged state support to the industry through emergency declarations and streamlined energy production.

A pro-AI regulatory climate: The new president also repealed Biden-era AI regulations that mandated AI developers to share safety test results for systems posing risks to national security, the economy, or public health, Reuters reported separately. Biden’s order also had required agencies to set testing standards and address cybersecurity and other risks. Meanwhile, Trump retained an eleventh-hour executive order by the former administration to offer federal backing for initiatives providing power to AI investments.

Elon Musk is not on board, it seems: The tech mogul and close Trump confidant was openly critical of the project hours after its launch, replying “they don’t actually have the money” to Stargate’s OpenAI statement on X which said that the project will “begin deploying USD 100 bn immediately.” Softbank, Musk claimed in a separate post, has secured only USD 10 bn so far.

Market reax: Oracle shares surged 7% following the announcement, while SoftBank shares jumped 12%. AI-related companies including Nvidia, Arm Holdings, and Dell also saw gains.

MARKETS THIS MORNING-

Asian markets are mostly in the green this morning, with Shanghai Composite up 1.4%, Hang Seng (Hong Kong) and Japan’s Nikkei both up 0.5%. Meanwhile, Wall Street futures are marginally lower as the S&P 500 nears record highs.

THE CLOSING BELL-

The EGX30 rose 0.5% at yesterday’s close on turnover of EGP 4.6 bn (21.6% above the 90-day average). Regional investors were the sole net sellers. The index is up 0.8% YTD.

In the green: Juhayna (+6.2%), Mopco (+4.3%), and Oriental Weavers (+3.3%).

In the red: Beltone Holding (-1.6%), Egypt Kuwait Holding -EGP (-1.2%), and Orascom Construction (-0.9%).