In a bold step to secure the United States’ leadership in artificial intelligence (AI), OpenAI and SoftBank (SFTBY) have each pledged $19 billion to launch Stargate, a venture focused on building cutting-edge AI data centers across the country.
Invest with Confidence:
- Follow TipRanks' Top Wall Street Analysts to uncover their success rate and average return.
- Join thousands of data-driven investors – Build your Smart Portfolio for personalized insights.
The first of these centers is already under construction in Texas, signaling the start of this high-impact project.
Ownership and Operational Details of the Deal
Within the Stargate venture, both OpenAI and SoftBank will hold 40% ownership stakes, marking their roles in the project’s execution. In particular, OpenAI will oversee day-to-day operations, utilizing its expertise in AI research and development,
Meanwhile, SoftBank will focus on managing the financial resources to ensure smooth execution.
$500B Investment Set to Boost U.S. AI Leadership
Announced on January 21, 2025, by President Donald Trump, the Stargate project represents a $500 billion investment over the next four years. This initiative is a joint effort between industry leaders, including OpenAI founder Sam Altman, SoftBank’s CEO Masayoshi Son, and Oracle’s Larry Ellison. The deal aims to construct data centers and the requisite energy infrastructure, with an initial deployment of $100 billion.
The aim is to enhance the United States’ leadership in AI technology, generate more than 100,000 jobs, and stimulate economic growth.
Rising Debate over the Initiative
While Stargate has received backing from key tech leaders, it has also faced criticism. Elon Musk, CEO of xAI and former OpenAI co-founder, has voiced concerns about the project’s funding and possible risks. He posted on his social media platform, X, stating, “They don’t actually have the money. SoftBank has well under $10B secured. I have that on good authority.”
Despite this criticism, Stargate represents a crucial step in advancing AI infrastructure and maintaining the U.S.’s leadership in AI.
What This Means for SFTBY Stock
Today’s news adds another feather to SoftBank’s cap in its quest to lead the AI market. Shares of SFTBY gained more than 10% in yesterday’s trading session. The company’s stock has performed well in 2024, with shares up 51% over the last 12 months.
