OpenAI Stargate is a $500B bet: America’s AI Manhattan Project or cheap?

In case you missed it amid the flurry of White House legislation in the days since President Trump returned to office for his second consecutive term this week, the biggest investment in AI was just announced yesterday afternoon: if”Stargate program“is a $500 billion (half a trillion) effort from OpenAI, SoftBank, Oracle, and MGX to create a new business that will build “a new AI infrastructure for OpenAI in the United States,” and as OpenAI put it in announcements on social network X“supporting the industrial recovery of the United States … also provides the ability to protect the national security of America and its allies.”

The ultimate goal: creating artificial intelligence (AGI), or AI that surpasses humans in the most economically valuable tasks, which has been the goal of OpenAI from the beginning – and ultimately, artificial intelligence, or AI smarter than humans can understand.

Following Trump himself, OpenAI co-founder and CEO Sam Altman appeared at the White House together with Softbank CEO Masayoshi “Masa” Son, Oracle CEO Larry Ellison, and said “I’m happy to do this in the United States of America. . I think this It’s going to be the most important project of our time – and as Masa said, for AGI to be built here, to create hundreds of thousands of jobs, to create a new sustainable business here – we can’t do it without you, Mr. President.”

Son called it “the beginning of the Golden Age.”

A number of high-tech companies have joined the process of building and operating infrastructure. Arm, Microsoft, NVIDIA, Oracle, and OpenAI are among the partners contributing their technology and resources to the project. Oracle, NVIDIA, and OpenAI, in particular, have collaborated closely on the computing infrastructure needed to make this project a success.

Although some see The Stargate Project as a revolutionary investment in the future of AI, critics argue that it is too expensive, unnecessary due to the rapid rise of thin, open source AI concepts like China’s DeepSeek R-1which was just released this week under the permissive MIT License – allowing it to be downloaded, modified or re-educated, and used freely in commercial and non-commercial projects – and which matches or exceeds the OpenAI models that o1 considers in the third party. signs.

This debate has served as a lightning rod for competing visions of AI development and geopolitical forces that create a major technological competition.

Continuous improvement?

For many advocates, The Stargate Project represents an unparalleled commitment to innovation and national competition, according to Previous periods of large infrastructure use such as US highways during the Eisenhower era (although, of course, it was public money – not private as it is now).

On X, AI reviewer and former engineer David Shapiro “America just won the next 50 years politically with Project Stargate,” and he compared it to past achievements like the Manhattan Project and NASA’s Apollo program.

He said that this level of investment in the wisdom of mining is not necessary but inevitable, given at a price. Shapiro described the project as an effective way to ensure America remains technologically advanced, making the investment a priority for solving global problems, driving economic growth, and protecting national security. “When America chooses something important and supports it with that kind of money? It happens. Time,” he said.

In terms of applications, advocates point to The Stargate Project’s promise of AI-assisted development in areas such as cancer research, personalized medicine, and disease prevention.

Oracle’s Ellison directly highlighted the potential of developing new mRNA vaccines and cancer treatments, revolutionizing healthcare.

Wasting money (what was bought)?

Despite such optimism, critics have criticized the project on a number of issues, from its financial viability to its approach.

Elon Musk, the head of the Department of Government Works (DOGE) under the second administration of President Donald Trump and a former co-founder of OpenAI, questioned the funding of the project.

Musk, who founded his AI company, xAI, with the Grok language model family, wrote on his social media page, X“They don’t have money,” said SoftBank-Stargate fundraiser – got “about $10B.”

In response, Altman responded this morning: “I have the utmost respect for your accomplishments and think you are one of the most inspiring entrepreneurs of our time.”

Others question the timing and rationale behind the move. Tech entrepreneur and commentator Arnaud Bertrand went to X to contrast OpenAI’s heavy-handed approach with the leaner, more conservative approach used by China. High-Flyer Capital Managementdevelopers of a new, high-performance large-scale language learning (LLM) model, DeepSeek-R1, released earlier this week.

Bertrand noted that DeepSeek has been able to outperform current versions of OpenAI at only 3% of the cost, using smaller GPU clusters and data centers.

He described the difference as a clash of philosophies, with OpenAI betting on large-scale infrastructure while DeepSeek is pursuing democratized, low-cost AI development.

“The important question remains,” Bertrand wrote on X. “What will OpenAI’s customers pay if the much cheaper DeepSeek is compatible with their new systems? Spending more money on data centers is not in the customer’s best interest.”

Bertrand also noted that OpenAI’s focus on architecture can challenge traditional thinking. “A $500B bet on development could be OpenAI fighting the last battle,” he warned, pointing to DeepSeek’s success as proof that innovation and creativity — not scale — are what drive the progress of modern AI.

The great intelligence divide: will centralized or decentralized AI win in the end?

At its core, the Stargate controversy reflects the fragmentation of future AI intelligence. Supporters of the project say large-scale infrastructure is necessary to unlock artificial intelligence (AGI) and solve the world’s most pressing problems. He sees Stargate as an important strategy to maintain US global leadership in technology, especially in the face of rising competition from China.

Critics, however, question whether such centralization is necessary – or even possible – at a time when decentralization and openness are leading to competing outcomes. Bertrand, for example, compared the current AI competition to the competition between Apple and Microsoft in the 1980s and 1990s.

Apple’s compact, highly integrated, premium ecosystem eventually gave up market dominance to Microsoft’s more affordable and more accessible products. He added that OpenAI customers may switch to cheaper alternatives like DeepSeek if the performance gap persists.

The controversy over The Stargate Project extends beyond technology, affecting national and international policy. Supporters see it as a necessary investment to ensure the US maintains its technology and address current challenges such as climate change, health care, and economic inequality. Skeptics worry that it could divert resources away from more efficient and integrated AI processes, especially if open source models become more widespread.

The participation of figures like Elon Musk, who has a special position as an entrepreneur and a competitor to OpenAI through his startup xAI, adds complexity to this issue, because it opposes the project from the same seat of power. it was announced.

The Stargate project is undoubtedly one of the most ambitious projects in the history of artificial intelligence, but its results are still unknown. If successful, it could reshape the US economy, protect America’s dominance of AI, and drive innovation in a number of industries. If its critics are right, however, it could be remembered as a costly mistake — an investment that failed to anticipate the rise of leaner, more sustainable AI models.

As construction begins in Texas, the philosophies and strategic divides between AI have not yet been addressed. The challenges are enormous, and the outcome of this debate could change the course of artificial intelligence—and global power—for decades to come. Meanwhile, the world is watching as America’s ambitious AI strategy takes its first steps, while challengers like China’s DeepSeek continue to quietly rewrite the rules of the game.