OpenAI unveils $500 billion Stargate project to emancipate its overreliance on Microsoft's infrastructure — as Elon Musk questions investor liquidity

OpenAI CEO Sam Altman, SoftBank CEO Masayoshi Son, and President Donald J. Trump alongside Oracle and MGX recently announced a project worth $500 billion dubbed Stargate. The colossal investment will be used to build massive data centers for AI advances in the United States.

The ChatGPT maker indicated that it will deploy up to $100 billion towards the project, potentially creating hundreds of thousands of American jobs while bolstering the economy. SoftBank and OpenAI are the leading partners of the project, with the former handling the finances and the latter taking the operational responsibility.

Related: SoftBank's missed opportunity to invest in OpenAI

Last year, a report emerged claiming Microsoft and OpenAI were planning to invest up to $100 billion in Stargate to free themselves from the shackles and overreliance on NVIDIA for AI chips. But things are a tad different now, with Microsoft missing from the fold and the project being more about data centers to facilitate computational power than developing AI chips.

According to President Trump:

"What we want to do is we want to keep it in this country. China is a competitor, others are competitors. We want to be in this country, and we're making it available. I'm gonna help a lot through emergency declarations, because we have an emergency, we have to get this stuff built. So they have to produce a lot of electricity. And we'll make it possible for them to get this production done easily, at their own plants if they want."

Oracle Executive Chairman Larry Ellison indicated that the first data centers are already under construction in Texas. Perhaps more importantly, the executive says the $500 billion project will facilitate the construction of the largest computer ever built. It will also lead to cancer vaccines, personalized medication, and prevention of pandemics like COVID-19. Sam Altman reiterated Ellison's sentiments by indicating that diseases will start getting cured at an "unprecedented rate" as the project advances.

Where does Microsoft's deal with OpenAI stand?

As you may know, Microsoft is OpenAI's largest investor, with a deal making it the ChatGPT maker's exclusive cloud computing partner for its sophisticated AI advances. Last year, OpenAI blatantly indicated that Microsoft is not meeting its cloud computing needs and that it would be its fault if a competitor hits the coveted AGI benchmark first.

Following the announcement of OpenAI's $500 billion Stargate project, Microsoft announced that its partnership with the ChatGPT maker is evolving as we transition to the next phase of AI. Microsoft indicated that key elements of the partnership will remain intact through 2030, including:

• Microsoft has rights to OpenAI IP (inclusive of model and infrastructure) for use within our products like Copilot. This means our customers have access to the best model for their needs.
• The OpenAI API is exclusive to Azure, runs on Azure and is also available through the Azure OpenAI Service. This agreement means customers benefit from having access to leading models on Microsoft platforms and direct from OpenAI.
• Microsoft and OpenAI have revenue sharing agreements that flow both ways, ensuring that both companies benefit from increased use of new and existing models.
• Microsoft remains a major investor in OpenAI, providing funding and capacity to support their advancements and, in turn, benefiting from their growth in valuation.

Elon Musk's lethal jabs keep rolling — but do they have merit?

As expected, billionaire and Tesla CEO Elon Musk critiqued the $500 billion Stargate announcement. According to Musk, the partners involved in the massive project don't have the money to fund it. "SoftBank has well under $10 billion secured," claimed Musk. "I have that on good authority."

According to SoftBank CEO Masayoshi Son, Stargate will expedite the process of building AGI, which is expected to be "coming very, very soon." The executive explained that the project will help bolster AI advances, potentially scaling superintelligence heights.

Sam Altman recently dismissed AGI deployment reports, indicating that the company has neither built nor plans to ship the benchmark next month, urging users to lower their expectations 100x while promising a lot of exciting stuff. However, the executive claimed that the OpenAI team knows how to build AGI, potentially shifting its focus to superintelligence.