How is Stargate's $500B getting funded?
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Illustration: Sarah Grillo/Axios
OpenAI, SoftBank, Oracle, and the UAE's MGX on unveiled a company on Tuesday that plans to invest $500 billion in AI infrastructure for OpenAI in the U.S.
Why it matters: SoftBank is doubling down on its OpenAI bet, and it reduces OpenAI's reliance on the infrastructure of Microsoft, its largest investor.
Context: The Stargate project will invest an initial $100 billion, with another $400 billion over the next four years.
Between the lines: A portion of the $100 billion is expected to be funded via third-party debt rather than equity, Axios has learned.
- SoftBank will be responsible for raising the debt.
- SoftBank and OpenAI are the largest equity investors in the first $100 billion in stargate yes, with Oracle and MGX also having contributed.
- Similarly, the additional $400 billion is expected to be a mix of current investors, new investors, and debt providers.
OpenAI will be responsible for the day-to-day operations of the business.
The big picture: SoftBank CEO Masayoshi Son previously promised President Donald Trump that he would invest $100 billion in U.S. firms over the next four years. This is part of that promise.
Zoom out: Microsoft had been OpenAI's exclusive provider of data infrastructure since 2019. As part of this deal, Microsoft says that exclusivity is now broken, though Microsoft will have the "right of first refusal" should OpenAI seek capacity elsewhere.
Reality check: "Trump will take credit for these spending commitments, but the rush to build AI data centers has been building for two years, and this money would likely have flowed regardless of who occupied the White House," - Sareen Habeshian, Axios
