Stargate: Who’s Doing What? One pays (Masayoshi Son), One builds (Sam Altman), One waits (Larry … [+]
President Donald Trump just announced Stargate, a $500 billion investment in AI backed by SoftBank, Oracle, MGX and OpenAI over the next four years.
What is really going on?
Let’s put it another way: OpenAI just secured a big customer – Stargate. SoftBank will finance the deal, while Oracle will provide the infrastructure for OpenAI’s AI services. This is good news for OpenAI. Training AI models is expensive, and open source AI is catching up fast. OpenAI’s only way forward is to provide exclusive access to data and users. As I wrote The race for AI agents: “To dominate AI agents, companies need access to users and enterprise data.” — OpenAI and Oracle have lagged behind in these areas. This deal sends a message.
of 500 billion dollars Message to China
A $500 billion message: “We will succeed – we will succeed.” For President Trump, this message is aimed at China. But others listened too, including Elon Musk, who lost his AI leadership and has been trying to catch up through lawsuits and ethical arguments. Not being a part of Stargate, he quickly dismissed it as “half-baked”.
To which Sam Altman replied, “Wrong”, and then asked:
“I understand that what is good for the country is not always good for your companies, but in your new role, I hope you will put America first.”
Easy for Altman to say – this deal is definitely great news for OpenAI. But is it as good for America?
Why announce this at the White House?
The AI race isn’t just about OpenAI vs. Musk’s Grok — it’s about who will dominate global technology and maintain hegemonic power. Artificial intelligence is set to reshape industries, and whoever leads in AI will reshape the world’s power structure. In 2019, I warned that China’s aggressive data collection strategy would give it a long-term AI advantage over the U.S. Today, the gap between the U.S. and China looks narrower than ever.
China’s DeepSeek R1
Get the latest research on AI reasoning. I predicted in my podcast with Jasper Masemann that: “AI reasoning will be the main development in 2024.” By the end of 2024, Sam Altman claimed that OpenAI now ‘knows’ how to build AI reasoning agents. How? I described the process in Battle of the Tech Giants: “o1 is designed to reason through an iterative, self-invoking process.” Now, after less than 60 days, that technological advantage is gone. China has caught up. DeepSeek’s R1, a Chinese AI model, uses the same self-critical and iterative learning approach – with stunning results.
The Hegemony of AI: Who Will Lead?
DeepSeek’s R1 is an open-source model, and soon many startup founders will be experimenting with it – indirectly helping China in its challenge to US AI dominance. And the irony? This is despite US efforts to block China from accessing AI technology – or perhaps because of those bans, which have forced China to stay ahead by open-sourcing its own models. With all of this in mind, it’s no wonder Trump chose the White House as the backdrop for $500 billion.We will compete with you” announcement.
Trump Rolls Back Biden’s AI Regulations
In addition to Stargate, Trump is also rolling back Biden’s Executive Order 14110, which imposed AI regulations. They had been criticized by me and others as not being effective. As I wrote in Biden’s AI plan: “…The White House seems to think AI can be controlled like nuclear weapons. But it’s not that simple.”
And clearly, it wasn’t. At least, the order didn’t stop OpenAI or China — if anything, it pushed them to innovate faster.
The AI race is open
With China pulling ahead and the US making massive investments, the AI race is far from settled. The core question remains the same: it’s not who has the best AI — but who controls the data and who builds products that businesses and people actually use. The journey has just begun.