Stargate-gate: Did Sam Altman Lie to President Trump?
Jobs, risks, and whether they have the money.
On January 21st, President Trump announced Stargate, a $500 billion project to scale up AI infrastructure in the United States, alongside big tech CEOs Sam Altman (OpenAI), Masayoshi Son (SoftBank), and Larry Ellison (Oracle).
It appears that Trump may have read from a statement prepared for him by the Stargate CEOs:
Together these world-leading technology giants are announcing the formation of Stargate … a new American company that will invest 500 billion dollars at least … creating over 100,000 American jobs, almost immediately. This monumental undertaking is a resounding declaration of confidence in America’s potential, under a new president — let me be, I didn’t say it, they did, so I appreciate that
$100 billion, they say, is to be deployed immediately.
Origins
This isn’t the first time Sam Altman has planned a $100 billion project called Stargate. Last March, there was reporting that Microsoft and OpenAI were planning an unprecedented supercomputer that could cost as much.
The US-based supercomputer, known as "Stargate," would be the centerpiece of a five-phase plan focused on a series of supercomputer installations the companies plan to build in the next six years, the outlet reported. Stargate, which would be phase 5 of the plan, could launch as soon as 2028, people involved in the proposal told The Information.
This hasn’t panned out, or at least some names have been switched, and relations between Microsoft and OpenAI appear to have since weakened, so perhaps we should treat claims made about Stargate 2.0 with some skepticism.
Jobs
In his announcement, President Trump said that Stargate will create over 100,000 jobs in the United States. While big projects like Stargate could create many jobs in the short term, it appears that he was misled on this point. This is not a mechanism to truly create jobs, quite the opposite.
Masayoshi Son himself said during the announcement "I think AGI is coming very, very soon. And then... That's not the goal. After that, artificial superintelligence will come".
The goal of this project is not to cure cancers, like Sam Altman spoke about in his comments, but to build AGI and artificial superintelligence. There are varying definitions of AGI, from “able to outperform most humans economically” to “smarter than the smartest human at everything”. Superintelligence is often defined as an AI system that is more intelligent than all of humanity collectively.
OpenAI defines AGI on their website as “a highly autonomous system that outperforms humans at most economically valuable work”
AGI will be able to replace most human jobs. This is one of several key motivations for investment into AI development. Projects like Stargate are likely to eventually lead to problems of mass unemployment. Fewer jobs, not more.
Sam Altman most surely knows this to be the case — he does not hide that he is trying to build AI more capable and more efficient than every human, the obvious consequence of this being that most jobs will just not be viable for humans to do — yet recently he has been downplaying the impact on jobs, writing in a blog post last September:
most jobs will change more slowly than most people think, and I have no fear that we’ll run out of things to do (even if they don’t look like “real jobs” to us today). People have an innate desire to create and to be useful to each other, and AI will allow us to amplify our own abilities like never before.
During the Stargate announcement, Sam Altman claimed that it would create “hundreds of thousands of jobs”.
Job displacement is something that is already starting to happen, with Salesforce (around 30th largest company by market cap, with over 72,000 employees) CEO Marc Benioff saying that they won’t be hiring any more software engineers in 2025, amid productivity boosts from AI.
In this case, it seems much more likely that Altman is engaging in a form of deception on this topic than the possibility that he actually believes the words he is emitting.
Based on Trump’s statement, and Altman’s own words he provided while standing next to him, this appears to have been mis-sold to Trump as being great for jobs.
Risks
Social disruption is not even the most compelling reason to be skeptical of those aiming to build superintelligence.
Nobel Prize winners, hundreds of top AI scientists, and even the CEOs of the AI companies driving this have warned that AI poses a threat of human extinction.
The current state of the field is that nobody knows how to ensure that AI that is more intelligent, and more powerful than us, will be safe. Nobody even has a particularly good idea for how to attempt this.
Continuing to rush headlong into a world where we are no longer the most powerful species on this planet is something that we should only expect to lead to disaster.
President Trump has spoken about his concern over some of the risks of AI, so he has some awareness. But it seems unlikely he would support a project like this if those pushing him to announce it were frank with him about even their own publicly stated beliefs about the risks.
This isn’t a point I’ve seen discussed elsewhere, I suspect because this form of deception has become normalized. We simply expect that when Sam Altman goes to Trump he tells him AI might cure cancer, and neglects to mention that, oh, by the way, the bad case “is lights out for all of us”.
Money
So $500 billion has been announced. OpenAI’s statement on their website reads: “We will begin deploying $100 billion immediately.“ Then they must have at least $100 billion, right?
The statement reads: “The initial equity funders in Stargate are SoftBank, OpenAI, Oracle, and MGX.”
Notably, Microsoft is not listed here, but instead as a “technology partner”. Microsoft’s CEO Satya Nadella was asked in an interview in Davos about this, he said
“Microsoft is investing 80 billion dollars in capital each year, I’m not particularly in the details of what they’re investing … all I know is, I’m good for my $80 billion, I’m going to spend 80 billion dollars building out Azure”
Nadella doesn’t say he’s investing in Stargate. The $80 billion is part of an already announced investment by Microsoft, and seems to be for scaling up Azure, rather than a part of Stargate. So it looks like it’s not coming from Microsoft.
Microsoft’s relationship with OpenAI appears to have soured in recent months, with Bloomberg reporting:
Microsoft did pump $750 million into OpenAI’s most recent $6.6 billion funding round. But its refusal to make a larger commitment prompted Altman to look for other partners and to chafe against a contractual exclusivity provision that required OpenAI to get all of its cloud capacity from Microsoft through 2030.
Elon Musk says they don’t have the money. Sam Altman hits back, and not very subtly accuses Musk of lying:
There are two questions here. Do they have the money ($100 billion to deploy now), and does SoftBank have more than $10 billion secured?
There was an article published this week suggesting SoftBank is preparing to invest $25 billion into OpenAI, which would make it OpenAI’s top investor, presumably as part of a separate investment to the Stargate one. This seems like decent evidence that they might have this kind of cash to throw around on AI.
President Trump was asked, in relation to Musk’s comments, whether he thought they had the money. His response was:
I don't know if they do, but you know they're putting up the money. The government's not putting up anything. They're putting up money. They're very rich people, so I hope they do.
I mean Elon doesn't like one of those people, so.
When asked whether it bothered him that Elon Musk criticized the deal, he said: “it doesn’t, he hates one of the people in the deal … one of the people he happens to hate, but I have certain hatreds of people too”
So it seems to be the case that Trump doesn’t actually know, but that he might suspect that Elon Musk is motivated by his feud with Sam Altman. We also got confirmation that Trump doesn’t currently intend to invest public money into the project.
However, The Information reports that OpenAI and Softbank have each committed $19 billion to the project, while Oracle and MGX will each commit $7 billion. That makes $52 billion, far short of the announced $100 billion, and scarcely more than 10% of the $500 billion project. The rest of it is supposed to be sourced from limited partners and debt.
The relationship with MGX, a UAE investment firm, hasn’t received as much attention as the others, but it is interesting, as last February Sam Altman was reportedly running around to UAE investors looking for $7 trillion dollars. That MGX is apparently providing precisely 0.1% of that amount, is quite amusing, but shouldn’t be surprising, given it’s only a $100 billion fund.
Atreides Management’s chief investment officer Gavin Baker wrote the following on Twitter:
Stargate is a great name but the $500b is a ridiculous number and no one should take it seriously unless SoftBank is going to sell all of their BABA and ARM.
SoftBank has $38b in cash, $142b in debt and generates $3ish billion in FCF per BBG. They own $143b in ARM and $18b in BABA. If they start selling ARM, their stake will be worth much less very quickly.
…
If you a professional investor or analyst and you took $500b at face value - or even worse wrote a *note* about this - you should resign in disgrace.
In conclusion, it seems to be the case that Stargate maybe only actually have $52 billion, if that, the rest is sort of hand waved. Sam Altman likely did mislead Trump — putting him in a difficult position of having to defend an announcement he made seemingly without being provided reliable information.
Stargate might get the money in the future, but it doesn’t look like they have it now.
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