Donald Trump positioned America to win the technological race for the 21st Century this week when he announced support for The Stargate Project, a $500-billion joint venture of private companies formed to retain America’s dominance in the development of Artificial Intelligence (AI). The consortium included OpenAI, Oracle, and Japan’s tech giant SoftBank and intends to build infrastructure to support the AI revolution with funds from the US government and other investors. Plans are to create more data centers and provide access to the massive energy needed to forge this advanced technology. Trump declared an “energy emergency” and promised to accelerate permitting processes for energy projects and reduce regulations to attract investors. AI will be as transformative as the invention of electricity, combustion engines, or space travel. And China has also allocated hundreds of billions to match American AI capability, nipping at its heels with recent breakthroughs. “AI will be a $20 trillion industry between now and 2030,” estimated Software expert Bill McDermott of ServiceNow.
However, hours after the Stargate press conference, Elon Musk, locked in litigation with OpenAI’s Sam Altman, dissed the deal online despite the President’s endorsement. He claimed the partners did not have the cash to pull it off. If true, the President didn’t do his homework. If not, Musk must walk back his allegations and resign immediately. Altman and the other partners quickly posted that Musk’s comments about SoftBank’s funding were wrong, adding that several sites were already underway. Altman posted: “I realize what is great for the country isn’t always optimal for your [Musk’s] companies, but in your new role, I hope you’ll mostly put [America] first.”
Others have claimed Musk was wrong, which was embarrassing for Trump, given his full-throated endorsement and boast about the Project. It was Musk’s second high-profile dust-up in days. Tech bigshot Vivek Ramaswamy left the DOGE cost-cutting project set up by Musk and Trump because Musk was impossible to work with. But Musk’s smear aside, the Stargate Project is already building data centers to address warnings by AI leaders that more data centers—as well as the chips, electricity, and water resources to run them—are needed to power their projects. Worries grow that China is gaining ground in developing more sophisticated AI, and recently, a startup called DeepSeek unveiled an AI model that Beijing claims is equivalent to OpenAI’s technology.
This deal is interesting on another level. Whoever wins the AI race will profit from changing the world economy, business, finance, governments, work, and existence. It is a battle between two distinct economic models: America’s cowboy capitalism and China’s heavily subsidized and coddled state-owned tech enterprises. This contest has no competitors, and the winner will take all. “I think this will be the most important project of this era,” OpenAI CEO Sam Altman said on Tuesday.
The undertaking, coupled with Trump’s avowed “energy emergency,” underpins his promise to bring America into a new “Golden Age” but also dovetails with his desire to reshape the energy landscape. He plans to increase supplies by suspending some environmental regulations and restricting crude oil exports. "We will drill, baby, drill," he said during his Inauguration speech. "We will be a rich nation again, and the liquid gold under our feet will help us do it. We will decrease prices, fill our strategic reserves again right to the top, and export American energy worldwide."
Trump also officially withdrew the United States from the Paris Climate Agreement with its restrictions and emission ceilings – a move that contradicts the desire of many tech giants who want “clean” energy to power their AI revolution. Many are committed to emissions-free nuclear to meet their needs, not fossil fuels. Google has been investing in nuclear, and Bill Gates has a company developing small reactors and working on creating affordable fusion. Because energy needs are so enormous, they want to use clean atomic energy to create a carbon-free grid or, alternatively, use natural gas with lower emissions than oil. For example, Microsoft signed a deal to reopen Three Mile Island to power data centers.
However, fossil fuels will also be required to power this AI revolution because of the scale of future demand. By 2028, AI data centers alone could account for as much as 12 percent of the nation’s electricity, according to a new report backed by the US Department of Energy. They consumed only 4.4% in 2023. “An energy breakthrough is necessary for future artificial intelligence,” said OpenAI’s Altman. AI devours power: One “rack” of traditional “servers” in a data center runs on 7 kilowatts of electricity, while a “rack” of “AI servers” uses 30 to 100 kilowatts. Estimates are that data centers’ energy demands in the US are expected to double by 2030.
This is a significant challenge, but Altman has convinced US officials that America must engage in the “AI arms race” that will transform the economy, workplace, lifestyles, and militaries. He began the Stargate Project by joining forces with Japanese giant SoftBank to build semiconductor plants to build AI chips. Altman, born in 1985 in St. Louis, is a ranking member of Silicon Valley’s “royalty” of billionaire CEOs. His OpenAI startup was backed years ago by Elon Musk, Peter Thiel, and other tech luminaries. Now, AI is essential. “AI is not a threat, but China is, and America must win the AI war,” said Musk and Silicon Valley honcho Mark Andreessen.
Hopefully, the Trump “deregulation is perfect” regime will realize that there must be guardrails on AI development to avoid a repeat of the catastrophic employment, social, and psychological problems caused by unregulated social media. While some observers despair that this won’t happen, innovation always leads to regulation in America, not vice versa. That can be hazardous, but it’s also why technological advances have always been rapid and sweeping.
In The Wall Street Journal, Walter Mead praised this unique MAGA-and-tech Trump “alliance.” “While much of the West remains gridlocked among antigrowth greens, sullen socialists clinging to unsustainable welfare states, and technophobic regulators more interested in blocking potentially dangerous technologies than in developing world-beating companies, American populists have aligned with tech moguls around a program of deregulation that will accelerate the transformation of the American economy.”
The reality is that free and unfettered enterprise (as well as vicious squabbling between competitors and entrepreneurs) is embedded in America’s DNA. Back in 1925, President Calvin Coolidge famously stated, “The chief business of the American people is business.”
When it comes to the AI data centers and the immense power necessary to feed them, I become a worried. I read it eveywhere. Why such a gigantic deployment of resources toward something that remains a bit abstract to the layman that I am? Or is it that this will completely change the life on this planet which it appears it will be. It is clear to me that AI is the single biggest technological breakthrough ever that will make humans largely expandable and every superpower wishes to control it. Scary... but I am afraid that this trend is unstoppable and every tech giant is already happy to say their technology already uses AI. We need another Hollywood production such as 2001 Space Odyssey and 1984 to make people realize where we are headed or will be living in Aldous Huxley's world because of AI? .. Have a good day all Thank you once more Diane...
All big tech developments in the past produced unforeseen consequences. The Cowboys ride first and monitor the trail later. Its the adventure of the New Frontier. Didn't the Cossacks do the same thing a 1000 years ago in Eurasia? Being a bystander complaining about the dust, will not stop the herd. So buckle up for the ride. Does Canada have any horses left in the race?