Trump announces $500b investment in AI infrastructure, aiming to outpace competitors

AI-powered data centres to drive healthcare innovation, boosting US economy with 100,000 new tech jobs

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WASHINGTON:

US President Donald Trump unveiled a private sector investment of up to $500 billion to enhance artificial intelligence (AI) infrastructure, aiming to surpass global competitors in this critical technological domain on On Tuesday.

Trump announced that OpenAI, the creator of ChatGPT, along with SoftBank and Oracle, are forming a joint venture named Stargate, which is set to construct data centres and generate over 100,000 jobs within the United States.

The companies, supported by other investors, have committed $100 billion for immediate use, with the remaining funding to be allocated over the next four years. The announcement was made at the White House with SoftBank CEO Masayoshi Son, OpenAI CEO Sam Altman, and Oracle Chairman Larry Ellison in attendance.

Ellison revealed that construction of the first data centres, each spanning 500,000 square feet, is already underway in Texas, with a total of 20 planned. These centres are expected to facilitate AI advancements, such as analysing electronic health records to aid medical practitioners.

The executives credited Trump for the initiative. Son remarked they would not have pursued the venture had Trump not been in office, while Altman highlighted Trump’s role in enabling the development of artificial general intelligence (AGI), a more advanced form of AI.

It remains unclear whether this announcement updates a previously reported initiative. In March 2024, technology news platform The Information had reported that OpenAI and Microsoft were planning a $100 billion data centre project also named Stargate, projected to launch in 2028.

The announcement comes on Trump’s second day in office, following his repeal of an executive order from former President Joe Biden aimed at mitigating AI-related risks to consumers, workers, and national security.

AI technology demands immense computational power, necessitating specialised data centres to link thousands of chips in clusters. Trump stated that these facilities would be supported by streamlined access to electricity, including on-site generation if needed.

However, the increasing energy demands of AI data centres, coupled with the electrification of buildings and transport, place significant pressure on the US power grid. The North American Electric Reliability Corporation has warned that nearly half the country faces potential power shortages in the coming decade.

During his 2016 campaign, Trump pledged a $1 trillion infrastructure plan, but this promise remained unfulfilled throughout his presidency from 2017 to 2021, with "Infrastructure Week" becoming a widely mocked term.

Market reactions to the announcement were largely positive, with Oracle’s shares rising by 7%, while shares of Nvidia, Arm Holdings, and Dell also saw gains. Investment in AI has surged since the 2022 launch of ChatGPT, as companies across industries seek to incorporate AI technologies into their offerings.