(Bloomberg) — SoftBank Group Corp., OpenAI and Oracle Corp. are forming a $100 billion joint venture to finance artificial intelligence infrastructure, an effort unveiled with President Donald Trump aimed at accelerating the development of the emerging technology.
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“We are starting to have tremendous investments coming into 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. Sun said the joint venture will deploy $100 billion “immediately” and aims to increase to “at least” $500 billion in AI projects, including data centers and physical campuses. Companies including Microsoft Corp and chipmaker Nvidia Corp are also expected to participate.
Trump has signaled a broad approach to ensuring US leadership in artificial intelligence, with pledges to stimulate private sector investment by speeding up the permitting process and easing other regulations. These efforts will be directed by technology industry leaders who have joined his administration, including incoming AI crypto czar David Sachs and Elon Musk, who has emerged as one of the president’s closest advisers.
The president said he would use emergency declarations and executive actions to help facilitate construction projects, including through easier access to energy. During their remarks, Trump and the executives highlighted potential applications of artificial intelligence in health and other areas that would fuel American economic growth.
“AI holds incredible promise for all of us, and for every American,” Ellison said.
SoftBank shares jumped to their highest levels since September in Tokyo on Wednesday, joining gains in Nvidia, Oracle and Arm Holdings Plc. More than 400 stocks in the S&P 500 rose during US trading on Tuesday, with the index rising nearly 1%, amid expectations that Trump will unveil a new push to invest in artificial intelligence.
However, the actual scope of the new commitments remained unclear.
Son visited Mar-a-Lago just last month to announce that SoftBank would spend $100 billion during the next presidential term, and Tuesday’s announcement was drawn from those efforts, according to a person familiar with the matter. Some of the data centers being considered for the project were already under construction, and OpenAI had already broadly outlined plans to invest in AI infrastructure, Ellison said.
Two weeks before taking office, Trump announced a $20 billion investment from Dubai-based billionaire Hussain Sajwani to create new data centers across the United States. On Monday, shortly after being sworn in, he rescinded Joe Biden’s artificial intelligence barriers and signed a series of measures to boost energy development in the United States to meet the surge in energy demand from data centers.
But doubts remain about whether the initiative – which the companies have dubbed “Stargate” – actually represents a significant increase over previous plans. Son’s announcement last month raised questions about where SoftBank will get capital to fund its initiative. The company had 3.8 trillion yen ($25 billion) in cash and cash equivalents on its balance sheet at the end of September.
Since winning a second term, Trump has ingratiated himself with Silicon Valley, where prominent executives, including Musk, Mark Zuckerberg, Jeff Bezos, Tim Cook and Sundar Pichai, joined him at the US Capitol for his swearing-in ceremony on Monday.
OpenAI’s Altman has spent months trying to form a global alliance between government and industry leaders to support boosting the supply of chips, power and data center capacity to support AI development. The company also alerted the Biden administration to the need for massive data centers that use as much energy as entire cities.
SoftBank previously invested in OpenAI’s recent fundraising round. Sarah Friar, OpenAI’s chief financial officer, told Bloomberg News last month that she was attracted to SoftBank because the company has “access to a lot of capital” and is willing to invest that money, including “in areas like energy and data centers.”
In an interview on Fox News late Tuesday, Ellison noted that the Stargate has been in the works “for a long time.” Construction is already underway on the first such data centers in Texas, and they will be turned over to Altman — and presumably OpenAI — “to start training their next model,” Ellison said.
“Obviously the size of this investment is huge,” Altman said. “And what I think this says about the potential progress of technology, at least what we all think it is, is huge.”
Cloud infrastructure providers such as Microsoft and Amazon.com Inc. and Oracle to expand computing capacity by creating new data centers. Oracle has already committed billions of dollars to building new data centers, and the company is expected to double its capital expenditures this fiscal year to more than $14 billion, due in large part to these projects.
–With assistance from Jackie Davalos and Rachel Metz.
(Updates with more of the event starting in the fourth paragraph)
