← The Jaeden Schafer Podcast
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- [00:02]
Host
Welcome to the AI chat podcast. On the podcast today, I want to talk about some massive news that we've been seeing this week out of OpenAI and that is their AI Stargate project. Now there's a lot to unpack here. Likely, I think a lot of people have probably heard there was day one or day two or day three of Trump's presidency. He gets in a room with a podium with Sam Altman, the CEO of Oracle, Larry Ellison and the CEO of SoftBank. And all three of them essentially announced that they're going to be creating a new organization that is going to have a $500 billion investment. This is the big eye watering part. It's going to be called Stargate and essentially it's going to be building AI infrastructure to power the power AI. It can be data centers to power these AI models. And a lot of people had. There's a lot of questions about this and a lot of new information has come out about this. We're going to be breaking all of it down today on the podcast. First of all, I wanted to go and talk a little bit about what the project actually is. OpenAI came up with an announcement and I wanted to read a couple things from that. And then I want to go into some of the controversies surrounding this. So the first thing is OpenAI says, quote, the Stargate project is a new company which intends to invest 500 billion over the next four years, they said, and it's going to be building new AI infrastructure for OpenAI in the United States. This is what's interesting to me. This isn't just like, okay, 500 billion, go. They said we're going to begin deploying 100 billion immediately and then, you know, presumably the rest of it will follow. Now there's been a lot of speculation and drama about if they actually have the money. And Elon Musk saying that they don't have the money and Sam Altman responding, we'll get into all of that. The next thing they say though is, quote, this infrastructure will secure American leadership in AI, creating hundreds of thousands of American jobs and generating massive economic benefit for the entire world. This project will not only support the re industrialization of the United States, but also provide a strategic, strategic capability to protect the national security of America and its allies. So a lot of people ask the question, like, why is Donald Trump announcing this? Why are they all going to him to do the big announcement? And I think the big part here is, of course he wants to say, look, I'm, I'm building all this cool Stuff in America, America's back or we're building stuff. So, you know, he wants kind of like some of that credit. But I think from an Amer, like from the perspective of as a country, if this really does create a hundred thousand jobs, that is pretty substantial. That's pretty impressive. And so you could see why this would get kind of into the realm of government, including, you know, if they actually have the money. But a $500 billion investment is eye watering. That's huge. So of course Trump wants to talk about that. And these guys are all, I think, happy to have their project, you know, soundboarded from the biggest soundboard. If the President's talking about it, that means everyone in the entire world is going to hear about it. So if they do need to raise more money for it, it's kind of like a good billboard advertisement. I think there's a lot of good benefits there that they're trying to cash in on there. All right, let's go back to what they're talking. They said the initial equity funders in Stargate are SoftBank, OpenAI, Oracle, MGX. Okay, so then we also have a report over from TechCrunch. TechCrunch initially reported $15 million was going to be put in by OpenAI. I think we've since seen that they're actually going to put in about $18 million. Right off the bat. Both of them are putting In, I think SoftBank and OpenAI are putting in 18 million. Excuse me. And so I think what's interesting here is the fact that, you know, that's not anywhere close to 500 billion. 15 billion. That's a lot of money. 18 billion, whatever it is. Right? That's a lot of money. That's nowhere close to the $500 billion. So where's the discrepancy? We're going to get into that. The next thing I want to say is who the other players are. We have Oracle, MGX, SoftBank and OpenAI are going to be the lead partners on Stargate. SoftBank is going to have some financial responsibility and OpenAI essentially is going to have the operational responsibility. Masayoshi Son is going to be the Chairman, that's the CEO of SoftBank Arm Microsoft Nvidia. Oracle and OpenAI are the key initial technology partners on this. And specifically they're also making investments as to what they're planning on doing with this. And, and the CEO of Microsoft has made some interesting comments on that. So the build out was currently underway. This is in Texas, where they're going to be building the first, the first plan or the first site, perhaps all of them. But the first is, is that 100 billion is getting deployed in Texas, they said as part of Stargate, Oracle, Nvidia and OpenAI will closely collaborate to build and operate this computing system. This builds on a deep collaboration between OpenAI and Nvidia going back to and a newer partnership between OpenAI and Oracle. This also builds on existing OpenAI partnerships with Microsoft. Right. They don't want to alienate their biggest investor who gave them their first $10 billion. They say OpenAI will continue to increase its consumption of Azure as OpenAI continues to work with Microsoft with its additional compute to train leading models and deliver great products and services. So what's interesting is they're bringing in new players. They're bringing in Oracle, that is competitor to Microsoft. But they're like, don't worry, we're still going to keep using more and more Azure. There just isn't enough, you know, Microsoft Azure. So we're going to be using other players as well. And that's interesting because it seems like they probably got to strike some sort of balance and deal with Microsoft where they're not like switching over to a new provider. They're like, no, we're even increasing, but we just need more. So this is interesting. They say this also builds on existing OpenAI partnerships with Microsoft. All of us look forward to continuing to build and develop AI and in particular AGI, for the benefit of all humanity. We believe that this new step is critical on the path and will enable creative people to figure out how to use AI to elevate humanity. So they say we want to connect with firms across the build data center infrastructure, landscape from power and land to construction to equipment and everything in between. Okay, so this is very optimistic, very exciting. $500 billion. What is the drama? What are, what's, you know, I guess is everything as it seems in regards to this whole story? So first of all, we have Elon Musk who tweeted and he essentially responded to OpenAI's tweet when they said like, hey, we have this big project going down. And he responded and said, I have it on very good authority that they don't actually have the money. So Elon said they don't actually have the money. SoftBank has well under $10 billion secured. I have that on good authority. And then Sam Altman responded and said, wrong, as you surely know. Want to come visit the first site already underway. This is great for the country. I realized that what's great for the country isn't always what's optimal for your companies. But in your new role, I hope you'll mostly put America first. Okay, so there is some drama. They are going back and forth on this. And definitely you have to know Elon Musk is a competitor in the space and probably is not thrilled about all of this. Now, I think he's kind of pointing at Sam Altman and SoftBank as maybe they, you know, they don't have all this money. Where are they getting 500 billion from? But they do have other partners. And so some of those other partners, specifically CEO of Microsoft, Satya Nadella, was particularly this whole thing. I want to play you a quick clip from this because I just thought it was so funny, the response to him, I guess, being questioned on the.
- [07:25]
Satya Nadella
Money side of things, commitment, $500 billion potential. I don't know if you saw. Elon Musk took to Twitter and said, they don't have the money. The money doesn't exist. As if this is not really going to happen. What do you think of that? Look, all I know is I'm good for my 80 billion.
- [07:44]
Host
That is the hardest line any CEO has ever uttered. CEO of Microsoft, Satya saying, don't worry, I'm good for my 80 billion. So I think at the end of the day, as it sits today, 80 billion from Microsoft 8. 18 billion from OpenAI, 18 billion from SoftBank. I mean, immediately, that's over $100 billion right there. And so I think they are actually going to deploy that now, to be fair, I think a lot of SoftBank's money is tied up in companies like AAM and, you know, money that they may raise in the future or companies that they have shares of or debt that they plan on taking on. And I think due to all of those reasons, they might not actually have the. I wouldn't be surprised if they don't have the 500 billion today. Actually, I guarantee they don't have the 500 billion today. But they do have, I think, a lot of money. They have a lot of commitments. And I think if the economy and if these sectors continue to grow in a way that they're predicting they will have the money. It definitely is a bit of a gamble making a big statement like this because they could have egg on their face if in the future they're not able to actually show they had all of this. So something that's kind of funny, there's all that drama, of course, between all of them. The press was asking Donald Trump about this the next day saying like, hey, you know, Elon's criticized Stargate on social media. What do you think about that? And Trump pretty much said something along the lines of, yeah, well, Elon hates one of the guys involved in that, so I don't really blame him. I hate people too. I hate certain people too, or something like that is a little, a little funny. So I think at the end of the day, Elon is gonna try to downplay OpenAI because they're a competitor, but I think they're, they're pulling off something big. Now, all of this is quite positive and optimistic. I'm optimistic on all of it, including OpenAI and everything they're doing. The one sour piece of news came out today that I think a lot of people kind of shifted a lot of the public opinion to all of this and that is the fact that Stargate and this $500 billion of infrastructure was just announced by the Financial Times. It will be exclusively for OpenAI. So a lot of people are excited, like, look, this is going to propel, this is going to propel AI forward and everything happening in AI. But it turns out OpenAI will be the only one that will benefit and they'll be having a 500 billion dollar project facility that is powering their AI. So they will essentially be able to have unlimited computer, unlimited power, Achieve AGI, everything they ever wanted, but there's no other company is going to be able to touch that. Now. A lot of people were like upset about this and they're like, oh, this isn't good for the industry or whatever, or like they're mad at Trump, like, how could you promote this guy? At the end of the day, like, these guys decided to come and make this announcement from, from the government. But like, this is a, these are private companies that are doing a deal together just because they decided to announce it. They're Trump's said in a questionnaire recently, he's like, these guys are rich. Whether they have the money or not, I don't really care. These guys are rich guys. I'm sure they'll get it all figured out. This isn't the government giving them any money, so no one needs to be upset about anything. This is a private company just doing their thing. So I think that the same response also goes to like everyone mad at OpenAI for like, yes, of course they're going to exclusively if they're built, if they're spending this much money to build some data centers, of course is they want it to be exclusively for them. That's why they're building it. They need all of that compute, presumably for their future projects. So I wouldn't be too mad. And I think we're just gonna have to wait and see what other companies come and essentially announce that they're gonna be doing similar projects or similar big projects. I know that Google and Microsoft and aws, Amazon are all looking at making, you know, big infrastructure plays. I think a lot of people are gonna be making the same infrastructure plays. So it'll be fascinating to see what happens. Regardless of 100 billion or 500 billion, however much money they have in the bank today, this is an astronomical investment. A hundred thousand jobs is huge. And this is no doubt going to grow the AI economy like never before. So I am absolutely bullish on everything happening here. Really excited and interesting. The last thing I wanted to say, if you have ever wanted to invest, you know, in growing and scaling your company using AI tools. I have a school community called the AI Hustle School community and every single week I release a video breaking down all of the tools, platforms, workflows that I am using to grow and scale my companies using AI. It's $19 a month. I'll leave a link in the description. Last month we had it at like $100 a month. We dropped the price for January. It's the new year. So if you're interested in joining the community, learning that, and having an incredible community to bounce ideas off of, I'll leave a link in the description to our AI Hustle school community. Thanks so much for tuning in and hope you have a fantastic rest of your day.