New US $500bn AI Infrastructure Project

After taking office in just a few days, on 22nd January, US President Donald Trump brought one of many big surprise to the market. At the White House, he announced that Open AI, Softbank, Oracle, and the UAE Sovereign Wealth Fund would come together to form a joint venture, and then co-build AI infrastructure in the US, under the project name of a science fiction movie 'Stargate'.

Initially, the joint venture will spend a capex of $100bn to roll out data centers in the US. Then, depending on certain undisclosed criteria, the total capex could hit $500bn in the coming 5 years. As a comparison, the 'Big 4' hyperscalers – Amazon, Microsoft, Alphabet, and Meta will collectively spend a total capex of $320bn in 2025F. The kick-off of the 'Stargate Project' will surely add more fuel to the already buoyant AI capex boom.

Not long after the announcement of the 'Stargate Project', it seemed that OpenAI and SoftBank decided to get tied up even more with each other. According to people with knowledge of the latest fund-raising deal of Open AI, Softbank would also participate and set to invest $40bn in the company. At the same time, the deal will also give a valuation of a whopping $250bn to Open AI. We have no details of the post-money shareholder structure yet, but surely, Softbank will become OpenAI's second largest shareholder, just behind Microsoft.

In addition, the timing of the deal also made it more interesting. Given the rise of DeepSeek, the market did hold some concerns about the future of OpenAI, especially the moat created by its first-mover advantage and its close-source model. Through this investment, SoftBank defied those concerns and cast a vote of confidence in OpenAI's future growth prospects. This may be too early to tell who is going to be the final winner in AI, but this is certain that the AI capex party will go on for the moment.