Elon Musk, CEO of Tesla and SpaceX, has cast doubt on the financial feasibility of the Trump-backed $500 billion Stargate AI Project, a large-scale initiative led by SoftBank and OpenAI to establish an advanced AI infrastructure across the United States. Musk questioned whether SoftBank has the resources to support the ambitious plan, raising concerns about its long-term viability.
When OpenAI announced the Stargate project on Tuesday, 21st January, on X, stating, “We will begin deploying $100 billion immediately,” Musk responded to the post, “They don’t actually have the money.” He added, “SoftBank has well under $10B secured. I have that on good authority.”
Stargate AI Project announced by President Trump
President Trump officially announced the Stargate AI Project during a White House press conference on Tuesday, January 21st. It has been described as a transformative effort for America’s technological future.
Trump called the project as a strong vote of confidence in America’s leadership, highlighting its potential to generate over 100,000 jobs and cement the United States as a global AI leader. He also promised to fast-track related infrastructure efforts using emergency executive actions.
BREAKING: President Trump announced the creation of the new major American AI company, ‘Stargate,’ which will invest $500 billion into the country and potentially create 100,000 new American jobs immediately. pic.twitter.com/HXy0NSJa9Y
— Libs of TikTok (@libsoftiktok) January 21, 2025
The project is spearheaded by SoftBank, OpenAI, and Oracle, with financial backing from MGX, an investment firm based in Abu Dhabi. Microsoft, NVIDIA, and Arm are also key contributors.
Construction has already begun in Texas, with plans for expansion to multiple sites nationwide. An initial $100 billion investment has been allocated, with the full $500 billion expected to roll out over the next four years.
Remarks from CEOs of SoftBank and OpenAI
SoftBank CEO Masayoshi Son, who serves as chairman of the project, has doubled down on his commitment. “Today, I am proud to commit $500 billion to this project. As [Trump] said, this is the beginning of a new golden age for America,” Son said.
Despite Son’s optimism, financial analysts remain skeptical. SoftBank’s history of aggressive investments, coupled with its current financial standing, has raised questions about its ability to deliver on such a large-scale commitment.
Sam Altman, CEO of OpenAI, called the initiative “the most important undertaking of this era.” He emphasized the project’s potential to create a new AI-driven industry and push the boundaries of innovation in the U.S. “It will create hundreds of thousands of jobs, establish a new industry centred here in the US, and push the boundaries of innovation,” Altman said.
Oracle co-founder Larry Ellison echoed this sentiment, describing the project as “historic.” He highlighted its potential to improve healthcare by advancing medical technologies and electronic health records.
However, financial concerns continue to loom. Nigel Green, CEO of deVere Group, noted that Trump’s urgency in fast-tracking the project underscores the scale of the economic transformation it represents.
