OpenAI's Portal to an Alien Intelligence: Stargate

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Good Morning,

The Stargate Project announcement was quite a show and let’s think about this for a moment. The brave new world of AI Infrastructure expansionism is upon us paving the way for ever bigger and more capable large language models (LLMs).

• But once you get the ball rolling of the Machine Economy, it cannot be stopped.

McKinsey said that global demand for data centre capacity would more than triple by 2030, growing between 19% and 27% annually by 2030.

Meanwhile Anthropic the spin-out and main competitor of OpenAI is receiving another $1 billion from Google (taking their stake to $3 Billion), and Dario Amodei talks a good game, but how can they compete with Stargate?

Anthropic is going to be building The Virtual Collaborator powered by their models that will take Computer Use to new levels. This will compete with OpenAI’s Operator (to be announced this week), Google’s Project Mariner and ByteDance’s UI-TARS, among others.

• Let’s be clear - Stargate (its own company) is the most impressive AI infrastructure project we’ve seen in the United States, ever.
• Although there is some doubt whether the $500 Billion number is accurate, or even realistic. Sam Altman has a history of over-promising and under delivering already, not unlike Elon Musk. If the funding is mostly raised via third party debt, what does that even mean?

Joint Venture Demystified

Stargate will be a Corporation

Stargate AI Infrastructure is a significant initiative announced by President Donald Trump, involving a massive investment of up to $500 billion aimed at enhancing artificial intelligence capabilities in the United States.

But it’s not really independent, it’s operated by OpenAI, mostly funded by Softbank and hosted on Oracle (not Microsoft). This means in the span of five years, OpenAI has “outgrown” Microsoft and even Microsoft Azure. Stargate was always Sam Altman’s baby, even since rumors emerged about it that much was obvious. It was hilarious to see them announce it as if this was Trump’s doing. Larry Ellison, Masayoshi Son and Sam Altman took turns stoking Trump’s ego in the announcement. The transcript is cringe-worthy. But pass it over here?

This project is a collaboration between major tech companies, including OpenAI, Oracle, and SoftBank, and is designed to build a robust infrastructure to support AI development and deployment. But what they don’t tell you is MGX’s direct involvement means a lot of the funding is coming from the UAE in the form of oil money.

Stargate and OpenAI

Given Softbank’s many bets on AI in the last decade via the Softbank Vision Fund, it’s not clear if this is even a great gamble. They don’t always do great due diligence on their projects. Of course it’s not usually their own money they are dealing with. At least this should benefit ARM. Softbank has around a 90% stake in ARM. ARM is also expected to launch their own AI chips this year or the next even ad Broadcom is competing with Nvidia to offer custom AI chips.

If you are curious about Project Stargate, I recommend you read this very carefully:

Key Companies:

• Softbank
• OpenAI
• Oracle
• MGX

Do note that it’s doubtful Oracle even gets substantial equity in Stargate.

Join our AI Chat on this announcement and read the comments of others here:

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• This wild announcement has garnered a lot of opinions from this community.

Key Partners

• Nvidia
• ARM
• Microsoft (minor role)

Nvidia and ARM (owned by Softbank) could benefit substantially as primary customers.

???? Keeping the United States First

The primary goal of the Stargate initiative is to establish a comprehensive AI infrastructure that can facilitate advanced AI research, development, and application across various sectors. This includes the construction of data centers, electricity generation facilities, and other essential components necessary for supporting large-scale AI operations (i.e. powering larger and larger language models for example). The project aims to position the U.S. as a leader in the global AI landscape, addressing the increasing competition from other nations in this critical technology sector.

Sam Altman slipping Project Stargate as some sort of instrument of MAGA and American exceptionalism feeds the China hawks that have the most investments and most to gain financially.

OpenAI’s terms with Microsoft drastically change with the launch of Stargate. Microsoft still gets 20 percent of OpenAI’s revenue till 2030 or when $100 Billion of revenue is reached (their legal definition of the marketing term “AGI”), but OpenAI is free to seek compute and Cloud partnerships elsewhere when needed. OpenAI seem to have more leverage now in the relationship as ChatGPT have over 300 million users. Microsoft Copilot’s adoption on the other hand, tragic.

AI Consortium via Sam Altman’s VC antics

Stargate isn’t actually a collaboration, it’s like an AI Infrastructure consortium, giving Sam Altman even more power. It gives Nvidia even more business for its future iterations of GPUs, AI chips and customer AI chips.

It also of course puts pressure on Google and Meta to spend even more Capex on AI Infrastructure. We already knew BigTech capex in AI Infrastructure was going up another 35 to 45% in 2025 (Bloomberg). Who knows what it does to Anthropic or xAI, it isn’t clear yet. Nor is it clear if they even have the other $400 Billion of supposed funding.

As for Microsoft’s role in OpenAI’s future, it’s a significant downgrade. Just listen to Salesforce CEO Marc Benioff on the riff between OpenAI and Microsoft. He’s spot on by the way.

Microsoft’s deal with OpenAI has ‘evolved’ to include a right of first refusal on supplying new capacity.

• OpenAI and Microsoft’s deal runs until 2030, around when OpenAI claims it will be profitable (they had said by 2029).
• Microsoft keeps its exclusive rights to OpenAI’s tech for products like Copilot, and OpenAI’s API remains exclusive to Azure.
• They’ll maintain their two-way revenue-sharing setup (it's been reported that Microsoft gets 20 percent of OpenAI’s revenue).
• Microsoft has rights to OpenAI IP (inclusive of model and infrastructure) for use within their products like Copilot. But customers no longer trust Microsoft in AI, due to its own the horrible roll-out of Copilot. So early access to OpenAI’s models is functionally almost useless.
• Microsoft could have substantial equity in OpenAI when they go public, which has many legal hurdles to cross as they pivot their business structure.
• Microsoft doesn’t just lose status with the new OpenAI arrangement, it loses leverages and it needs to build its own models internally yet another cost as its Copilot roll-out has been decimated by the popularity of ChatGPT and ChatGPT Enterprise. It’s the ultimate embarrassment for Microsoft, even if they talk it up as if this benefits them. Sam Altman has totally manipulated Satya Nadella who seems clueless. I’m not alone it seems in my thinking that Microsoft is a loser here.

Microsoft is a major loser in Project Stargate for many reasons. As the biggest investor in OpenAI and its principal cloud partner, is losing its designation as exclusive provider of computing capacity for the artificial intelligence startup and its leverage over the AI Startup is never coming back. Microsoft created a competition that has materially impacted their revenue and ability to leverage AI in their core software businesses.

But who owns Stargate?

It appears like OpenAI and Softbank are likely to have the most equity in Stargate (see more below), with MGX and others having some too. In fact, it’s not clear how much skin in the game Oracle or Nvidia will really have. If it’s taken Sam Altman years to come up with $100 Billion (not even confirmed), no idea how they get the other supposed $400 billion in just four years unless it’s from the U.S. Government. [Ed Note: debt financing and third party debt, apparently]

With Stargate, OpenAI and likely Nvidia have the most to gain. Softbank and MGX are taking huge risks here, while Sam Altman has easily the most to gain. Oracle frankly could use the business as other Cloud providers have taken leadership in recent years. Trump is expected to try to fast-track AI Infrastructure development and AI datacenter projects with a number of Executive Orders. This only forces OpenAI and Anthropic more into services to the DoD and the National Defense sector. Project Stargate show an America where the financial elite have nearly total control over the future of AI and the direction of the country.

OpenAI deceptive about Funding

The models OpenAI hopes to build and the user base it's looking to serve requires now tens and hundreds of billions of dollars in compute. Although the cost of o3 like models will be passed to the consumer even as others are expected to catch up relatively quickly. Some OpenAI shareholders felt Microsoft wasn’t moving fast enough to supply OpenAI with computing power, so this deal solves that issue. But it also further splinters the relationship between people like Mustafa Suleyman and Sam Altman. Microsoft has effectively been scammed and their B2C AI brand reputation is in tatters and ruins. Especially when competing head to head with ChatGPT.

Elon Musk of xAI also doesn’t believe OpenAI even have the $100 billion necessary to kickstart Stargate, saying Softbank don’t even have $10 Billion yet for Stargate. Neither is it clear where OpenAI is itself finding the funding nor how much MGX could possibly commit. Stargate's first data centre is under construction in Texas, according to Oracle's chief technology officer, Larry Ellison, and more will be built in other US locations.

OpenAI Hype Creating a Spectacle and Marketing Timebomb

The $500 billion is supposedly to be for just the next four years of Stargate. But like previous comments by Sam Altman (e.g. $7 Trillion), this sounds like a variety of Trump misinformation. The U.S. will likely struggle with the energy plans required to power all of their new datacenter campuses for the future AI.

The companies expect to commit $100 billion to Stargate initially and pour up to $500 billion into the venture over the next four years.

Also in the illustrious announcements is that they promise it will create “hundreds of thousands” of jobs and “secure American leadership in AI.” But this also is highly doubtful. Many of the claims at the Press Conference do not seem factual. In fact to the contrary, a day earlier Trump rescinded Biden’s executive order on AI safety putting the U.S. back years in AI regulation. Anything to keep stoking an already inflated U.S. stock market.

Biden's order required developers of AI systems that pose risks to U.S. national security, the economy, public health or safety to share the results of safety tests with the U.S. government, in line with the Defense Production Act, before they were released to the public.

The U.S. stock market on the Shiller PE Ratio and Buffet Indicator (please look them up) are being warped beyond recognition in a major stock bubble but projects like Stargate are stoking the U.S. stock market even higher. It’s a kind of ponzi scheme and people like Sam Altman are orchestrators of it all for the financial elite. OpenAI in the scheme of Stargate, benefits the United States soley, certainly not the rest of the world.

OpenAI’s mission claims:

Our mission is to ensure that artificial general intelligence—AI systems that are generally smarter than humans—benefits all of humanity.

In 2025, the company has deviated so far from their Mission that it’s literally been outdated. OpenAI is not thought to be among the leaders in AI saftey of LLMs nor do most enterprise level companies trust it with their data.

It’s very clear that Oracle, Softbank, Microsoft and even Nvidia are just passengers on the Stargate firm’s uncanny projections, actually governed by Sam Altman. Sam Altman was angered when Microsoft acquired Inflection and brought on Mustafa Suleyman so the bad blood continues and it’s going to make Satya Nadella look like a fool. This wasn’t hard to predict of course. SoftBank chief Masayoshi Son and Oracle co-founder Larry Ellison look like outdated caricatures in the story. Trump is not necessarily known for his vision of the future with vague and worrisome imperialistic claims for America in its foreign affairs policies that are creating geopolitical chaos even in his customarily unpredictable and volatile statements.

That OpenAI can keep changing the rules on Microsoft is troubling, Elon Musk - both a top adviser to Trump and rival to OpenAI CEO Sam Altman - on Wednesday said the venture does not "actually have the money" it has pledged to invest. If he’s right, this could hurt the reputation of OpenAI moving forwards, no matter how successful ChatGPT was in its 2024 growth and with its illustrious B2C first mover advantage in paid subscriptions.

“SoftBank and OpenAI are the lead partners for Stargate, with SoftBank having financial responsibility and OpenAI having operational responsibility,” the statement continued.

In a sense Stargate is OpenAI’s independence day and the fulfillment of Sam Altman’s economics, basically the manifestation of his best super-power, his Venture Capital networking with the ultra-financial elite class. But is he the right CEO to make sure that OpenAI is fiscally sound? He seems to be fairly poor in that department as a leader. He’s not a professional CEO or executive in that sense and that’s a problem when we are talking about tens of Billions of dollars.

Microsoft and OpenAI have revenue sharing agreements that flow both ways, ensuring that both companies benefit from increased use of new and existing models. But does Microsoft actually benefit from Stargate? Hardly at all, save for whatever equity they will end up in the IPO. An IPO that might be rushed due to the stupendous cash-burn rate. OpenAI lost more than $5 Billion in 2024, and in 2025 and 2026 it will be much more.

?? Where is the money actually coming from?

• A portion of the $100 billion is expected to be funded via third-party debt rather than equity, according to Axios.
• SoftBank will be responsible for raising the debt.
• SoftBank and OpenAI are the largest equity investors in the first $100 billion, so presumably they have the most equity each.
• Similarly, the additional $400 billion is expected to be a mix of current investors, new investors, and debt providers.

I don’t have to tell you that third party debt is a pretty shady way of funding a project.

"We wouldn't be able to do this without you, Mr President," he added, even though the project was underway before Trump won November's election. - Sam Altman

Sam Altman said it was the most important project of our era, i.e. his project. OpenAI was previously locked into using Microsoft’s Azure cloud infrastructure exclusively for its computing needs. Now, that deal is over.

Investment in AI is currently exploding, driving demand for new data centres while also raising concerns about the huge amounts of water and power (energy) the facilities require as well as competition for key real-estate that are the most favorable for such datacenter campuses. OpenAI is betting on Abilene, Texas as the first stop in their AI Infrastructure spending frenzy.

We should note that Softbank has already made commitments to OpenAI, you know because Son enjoys ChatGPT. SoftBank is already an investor in OpenAI, having reportedly committed $500 million toward the AI startup’s last funding round and an additional $1.5 billion to allow OpenAI staff to sell shares in a tender offer.

"SoftBank has well under $10B secured. I have that on good authority," - Elon Musk

While this relegates Microsoft to the background, it also stokes the competition between Elon Musk and Sam Altman, with OpenAI reportedly also about to build humanoid robots internally. If they do well, they are highly likely to acquire Figure AI as well.

The key point for Stargate is this is just an extension of OpenAI. Since OpenAI will be responsible for the day-to-day operations of the business. This gives control of the project mostly to Sam Altman. Let’s see how long Masayoshi Son lasts there. Satya is trapped, and is committed to $80 Billion as well.

OpenAI claims the Stargate Project is a new company which intends to invest $500 billion over the next four years that will be great for the world, but is that even true? Is third party debt mostly for its OpenAI’s own benefit aligned even with the interests of the United States? I’m sure Elon Musk must also see the danger.

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United States wants to control Future AI Technology

This simply accelerates AI Infrastructure developments, not to compete with China but to have control over a future technology. Sam Altman wants his own AI Supremacy kingdom. If Stargate works out, OpenAI will have a significant edge of the likes of Anthropic, Mistral and all other AI startups left that still build models. It forces Meta, Microsoft, Google and Amazon to follow in the eerie datacenter campus projects and really has hardly anything to do with contributing to a better the world. In fact, Trump sounds downright antagonistic to the rest of the world in his final term.

OpenAI will also continue to partner with the DoD and National defense sector to gain a kind of lobbying immunity for antitrust considerations, as we can tell from their board choices. OpenAI could continue to partner with Palantir, Scale AI, Anduril and their partners to make sure that America is a more automated war machine funded by things like third party debt and Middle Eastern oil money. Is that the world we want to live in? And what will China do to match this rising AI Infrastructure threat?

SoftBank CEO Masayoshi Son previously promised President Donald Trump that he would invest $100 billion in U.S. firms over the next four years. This is part of that promise.

Just don’t tell them how much money you actually have in Softbank’s commitment Masa, this is a ponzi scheme of another order. Sam Altman will have a lot of equity in OpenAI and Stargate and join the ranks of Tycoon monopoly capitalism the Billionaires he so nobly serves. Microsoft backing him is scary for free competition among AI startups. Stargate as a MAGA company is good marketing, but let’s understand what this actually means for Monopoly capitalism. It means people like Altman, Zuck and Musk control a lot of America’s future. From their doomsday bunkers, if necessary. The ponzi-scheme economics of the ultra financial elite continues to defy historical norms and can only end badly.

OpenAI was most recently valued at $157 billion, meaning even a 1% stake would be worth $1.57 billion. Sam Altman could easily get 5-10% equity in both OpenAI and Stargate. Including the dozens of his other investments, namely in companies like Reddit. OpenAI’s VC backers want Sam Altman to have equity to have more “skin in the game”. If he put together the Stargate consortium, he will likely even have more equity in Project Stargate. Conclusion: Sam Altman likely is one of the richest people on Earth in the 2030s.

Project Stargate: Unintended Consequences

Microsoft had been OpenAI's exclusive provider of data infrastructure since 2019. Now just five years later, that deal is over. OpenAI is breaking free from Satya Nadella’s oligarchy in part, but with the reassurance that Microsoft will pour in tens of more billions of dollars most likely. Too big to fail much? As Sam Altman sets his sights on bigger and better things for his OpenAI’s metamorphosis into yet another BigTech company that’s hugely unprofitable, but too big to fail. Musk has been visibly feuding with Altman since leaving OpenAI's board in 2018 and now he’s part of the shadow government of Trump, a position which he purchased, not by any special merit.

But let’s be clear, Project Stargate continues to degrade meritocracy and American values in Capitalism. These consortiums are manifestations of Monopoly capitalism in the wild. Many analysts have corrected mentioned that Trump will take credit for these spending commitments, but the rush to build AI data centers has been building for two years, and this money would likely have flowed regardless of who occupied the White House (Axios). The unintended consequences of rushing AI Infrastructure simply gives China more incentives to do the same, and we all know who are better at huge infrastructure projects around here on this planet.

In the Press Release by Softbank they claim Project Stargate will create “hundreds of thousands” of American jobs. This at a time when BigTech are actually doing layoffs in part because AI coding tools are meaning they need less engineers among other positions. OpenAI and Stargate on the contrary could facilitate fundamental shifts in technology that will hurt workers.

Every two years, global think tank World Economic Forum (WEF) publishes The Future of Jobs Report. The report surveys leaders at 1,000 large employers about their predictions for the world of work over the next five years.

• 92 million jobs are expected to be displaced by 2030. With many more in the 2030 to 2035 period.

Future of Jobs Report 2025

OpenAI’s deceptive AGI marketing term aside, it’s not even clear if OpenAI will be able to compete with Anthropic and Google in Enterprise AI limiting their ability scale revenue substantially in the years ahead. Nor are they particular good at retaining key talent. Typically these are major red flags. As much as Sam Altman is the solution, he’s also a major problem for OpenAI’s future.

Stargate makes the Broligarchy in America even stronger, raises concerns over the institution of democracy and capitalism, and further stokes exaggerations around the impact of artificial intelligence.

Microsoft is losing its designation as the exclusive provider of computing capacity for OpenAI. And can be expected to play a more minor role in OpenAI’s future as they seek to build their own LLMs and SMLs internally now.

Screenshot, Getty images.

Stargate as Sovereign AI Project for the United States’ AI Supremacy

Softbank and MGX can double down on OpenAI and still OpenAI could go bankrupt. Stargate isn’t really a joint venture, it’s OpenAI leveraging its relationships with the financial elite of the world to gain unfair advantages over its rivals. Stargate as a consortium is reminiscent of the consortium Facebook wanted to create with stable coins. It turns out AI Infrastructure and datacenters are much better and bigger business with Generative AI’s momentum.

You might recall back in September, Microsoft partnered already with Blackrock and MGX to build a group to back such things like Stargate. It’s called the Global Artificial Intelligence Infrastructure Investment Partnership, or GAIIP. The U.S. is trying to lure the Middle East into partnership on AI and with Stargate and xAI have mostly achieved this goal. The group aimed to assemble $30 billion of initial capital, with a future goal of bringing in up to $100 billion, including from debt financing. Debt financing is one of the persistent recurring themes in this new AI datacenter oligarchy. MGX itself was launched in March, 2024 with Abu Dhabi’s Mubadala and AI firm G42 as founding partners.

If Altman and Trump had their way we’d be considering Project Stargate as a Sovereign AI project of the United States Government. That way, the financial elite could manipulate the U.S. stock market in a seemingly legitimate way. That’s the brave new world Sam Altman is ushering in with this project.

Symbolically Trump announcing it is of course a great public relations deal for OpenAI and one of the reasons they spend so much on lobbying, PR and comms. Trump called Altman the “leading expert on AI”. Well he’s certainly one of the leading profiteers of the new Broligarchy. There’s no way around what this actually represents and what it means for the future.

Visit the Wikipedia page

Future Watch

• That Abilene site will be Stargate’s first site, and OpenAI says that Stargate is “evaluating potential sites across the country for more campuses as [it finalizes] definitive agreements.” By 2029, Stargate could scale up to 20 data center installations.
• TechCrunch reporting details that The Information previously reported that OpenAI was negotiating with Oracle to lease an entire data center in Abilene, Texas — a data center that could reach nearly a gigawatt of electricity by mid-2026. (A gigawatt is enough to power roughly 750,000 small homes.) Data center startup Crusoe Energy was said to be involved in the project, which was estimated to cost around $3.4 billion.
• Microsoft’s capex on AI Infrastructure is roughly $80 Billion for datacenter rollouts. So when Satya Nadella throws out that number, that’s what he’s actually referring to. Not his commitment to Stargate alone. But Microsoft’s entire datacenter AI capex.
• On January 23rd, 2025 The Information reported OpenAI, SoftBank would each commit $19 Billion, but OpenAI would have a 40% stake in Stargate which is really just an extension of OpenAI like I had assumed. Later Reuters and others picked up these figures as well. Not clear how how big MGX’s stake is.

And so it begins.?