OpenAI and Other Tech Titans Worked on Stargate Deal Months Before Trump Won

OpenAI CEO Sam Altman speaks with President Donald Trump in the Roosevelt Room at the White House on Tuesday. SoftBank CEO Masayoshi Son and Larry Ellison, chairman and chief technology officer of Oracle Corporation, are on the right.
17:15 JST, January 26, 2025
The $100 billion artificial-intelligence deal that escalated a feud between Donald Trump adviser Elon Musk and OpenAI CEO Sam Altman was in the works for months before President Trump’s election victory – undermining tech titans’ declarations that the venture was possible only because of Trump’s inauguration.
Altman has been discussing plans for a $100 billion venture, called Stargate, since at least March, 10 months before Trump returned to the White House, OpenAI spokeswoman Liz Bourgeois confirmed. OpenAI and Oracle finalized a partnership in June to build at least one of the data centers that is part of Stargate in Texas, according to company announcements, and construction began over the summer.
The $100 billion that the companies committed to invest Tuesday is not all new funding. Money that was already spent on the ongoing construction of the 10-building data center campus in Abilene, Texas, is being counted in the figure that the companies trumpeted in the White House Roosevelt Room on Tuesday, Bourgeois said.
However, at the White House on Tuesday, SoftBank CEO Masayoshi Son said the companies wouldn’t have done the deal without Trump winning the election, and they signed an agreement for the venture on the day of his inauguration because it was an example of the “golden age of America” that Trump spoke of in his speech.
“We wouldn’t be able to do this without you, Mr. President,” Altman said, turning to Trump.
The companies’ decision to unveil the project at a West Wing news conference highlights how business leaders have mounted an aggressive charm offensive with Trump as he returns to the White House, in part through splashy investment announcements that he has touted in news conferences as a sign that his agenda is already reshaping the economy. But such announcements aren’t without political risks, as OpenAI learned when Musk criticized the deal on the social network he owns, X.
“They don’t actually have the money,” Musk wrote to his 214 million followers. “SoftBank has well under $10B secured. I have that on good authority.”
“Wrong, as you surely know,” Altman replied. “Want to come visit the first site already under way?”
Bourgeois told The Post that OpenAI has “been on a journey” of identifying the best path for expanding its computing capacity for more than a year. The tech publication the Information first reported OpenAI’s plans for the deal 10 months ago, though at the time, OpenAI was planning the initiative with Microsoft. The deal has since changed to include different partners: SoftBank, Oracle and MGX.
“This deal at this magnitude only came together following the election as a result of heightened investor enthusiasm in anticipation of a Trump administration,” Bourgeois said.
Some firms were hesitant to commit the funds before Trump’s election because they were concerned that the previous administration could obstruct the project, according to a person familiar with the deal, who spoke on the condition of anonymity to discuss private plans. The person said the economic conditions created by the election resulted in all of these companies coming together for one large project, rather than several smaller deals.
White House communications director Steven Cheung also disputed the notion that the deal was in the works before this week, arguing, “President Trump is the only person who could have put these deals together.”
Oracle did not respond to requests for comment. A spokesman for SoftBank and Stargate declined to comment.
The firms have secured $100 billion for the deal, according to an OpenAI announcement and a person familiar with the investment. The goal is for the project to eventually spend $500 billion over four years, but the companies have not yet have not yet raised an additional $400 billion in investment. The new company behind the venture, Stargate LLC, was incorporated in Delaware on Wednesday.
The criticism from one of the president’s top advisers of a deal that Trump announced sent shock waves through some of Trump’s supporters. But the president said he wasn’t bothered by Musk weighing in and he didn’t know whether the companies actually had the money they said they did.
“[Musk] hates one of the people in the deal,” Trump said Thursday. “The people in the deal are very, very smart people. … But I have certain hatreds of people, too.”
Trump’s comments indicate he is aware of the years-long feud between Musk and Altman, who in 2015 co-founded OpenAI together but now run competing AI companies.
Musk parted ways with OpenAI in 2018 after failing to persuade Altman and others to give him control of the company. In 2023, Musk founded a rival AI start-up, xAI, that launched a chatbot called Grok to compete with ChatGPT. And last year, he filed a lawsuit against OpenAI and Altman, alleging that they had tricked him into funding a nonprofit that later pivoted to seek profits.
Some of Trump’s allies say Musk’s criticism of the deal is inappropriate.
Stephen K. Bannon, the popular MAGA podcast host who served as Trump’s first White House strategist, said no adviser should be allowed to put his personal interests ahead of the president’s. Bannon said White House chief of staff Susie Wiles needs to tell Musk to stick to his task of finding $2 trillion to cut from the federal budget before a deadline to fund the government in March, along with a looming debt limit. (Bannon and Musk also have clashed over immigration policy, pitting the tech billionaire’s support for high-skilled foreign visas against the MAGA movement’s more nationalist impulses.)
“You have a huge mandate to cut government spending. I don’t remember your mandate opining on investments that the president is proud of happening on his watch,” Bannon said. “It’s not acceptable. This is about the functionality of the White House.”
The Stargate venture is the second data center deal that Trump has touted this month. He previously announced a similar investment from the Emirati company DAMAC, which would invest $20 billion in data centers in Texas, Arizona, Oklahoma and several other states.
On Thursday evening, DAMAC Chairman Hussain Sajwani told The Washington Post that he had not been not aware of the Stargate deal before the news conference, though he has been spending time at Mar-a-Lago and dining with Trump, and attended the inauguration.
Sajwani said he’s not concerned about competing with the Stargate companies, and considers SoftBank’s Son a friend. “There’s enough pie for everyone,” he said. Sajwani said he expects to put up around $5 billion in equity for his project and is in talks with potential partners for the rest of the $20 billion.
Trump has a track record of describing private-sector technology investments as political victories. But the benefits he promises do not always materialize, and some of the initiatives he has celebrated were planned before his involvement. In his first term, Trump called a $10 billion plan to create a Foxconn manufacturing campus in Wisconsin “the Eighth Wonder of the World.” But the project to create 13,000 new jobs did not materialize. He also promoted a plan to save jobs at a Carrier air-conditioning factory in Indiana in November 2016. That plant later eliminated 500 jobs despite receiving incentives from the state’s then-governor, Trump’s running mate Mike Pence.
In a town hall with employees Wednesday, Altman told his staff that Trump is very enthusiastic about AI and believes that AI capable of human-level intelligence, known as “artificial general intelligence,” will be developed during his presidency, according to a person familiar with the discussion who spoke on the condition of anonymity out of concern they would lose their job for sharing internal company information.
Altman told employees that the deal is aimed at giving the company more independence from data centers belonging to Microsoft, OpenAI’s primary backer, according to the person. He said Stargate will have only a few dozen employees of its own, and most of the new organization’s work will be done by employees from the companies funding and running it.
Altman also told employees not to worry about Musk’s criticism of the Stargate deal, encouraging them to simply ignore him, the person said.
But Musk’s criticism of Altman and the project has led to attacks from other pro-Trump influencers. Mike Cernovich, a well-known internet personality who helped popularize the “Pizzagate” conspiracy theory, began sharing some of Altman’s posts from October 2016 that said he was working on a new project “to stop Trump.”
“People change but we all need to know what this project was from Trump’s new best buddy and AI overlord,” Cernovich tweeted Wednesday night.
The same night, Altman tweeted that his perspective on Trump had changed as he watched him more closely.
“I wish i had done more of my own thinking and definitely fell in the npc trap,” he wrote, referring to a “non-player character” that a video gamer can’t direct. “I’m not going to agree with him on everything, but i think he will be incredible for the country in many ways!”
"News Services" POPULAR ARTICLE
-
Executives at Japan’s Fuji TV and Parent Firm Resign over a Sex Scandal Linked to a Former Star
-
Japan’s Nikkei Stock Logs Worst Day in 4 Months on US Tariff Worries; Automakers Slump (UPDATE 2)
-
Japan’s Nikkei Stock Falls over 1% as Chip-Related Shares Track Nasdaq Lower (UPDATE 1)
-
Japan’s Nikkei Stock down Nearly 1% as Tech Shares Stumble (UPDATE 1)
-
Japan’s Nikkei Stock Average Ends Lower as Strong Yen Hurts Appetite (Update 1)
JN ACCESS RANKING