Updated with video content.

President Donald Trump has declared a significant investment of up to $500 billion in artificial intelligence (AI) infrastructure, starting with new data centers in Texas.

OpenAI, Softbank, and Oracle, headquartered in Austin, will be among the initial investors, contributing $100 billion to a collaborative venture named Stargate over the next four years. During a White House event on Tuesday, Oracle’s Chief Technology Officer Larry Ellison was joined by Softbank’s CEO Masayoshi Son and OpenAI’s CEO Sam Altman to make the announcement.

Trump remarked that Stargate aims to develop the “physical and virtual infrastructure necessary to drive the next wave of AI advancements.”

“There are competitors like China out there; we want to establish our presence and make these resources available here,” Trump stated. “I will assist significantly through emergency declarations since we are in a critical situation—we need to develop this infrastructure swiftly. This requires substantial electricity production, which we will facilitate to ensure they can efficiently produce power at their facilities if necessary.”

Ellison revealed during the briefing that ten data centers for the Stargate project are currently being built in Texas, including a massive facility covering 1 million square feet.

“We’re starting with ten centers, but we plan to expand to twenty and additional sites beyond Abilene, which is our initial location,” Ellison mentioned.

CBS News had previously indicated that the Stargate initiative would kick off with a Texas data center project, eventually branching out to other states.

“AI offers tremendous potential for all Americans,” Ellison emphasized.

Trump projected that Stargate would generate “over 100,000 American jobs almost instantly.” However, further specifics about the Stargate initiative and its partnerships are still forthcoming, and additional investors may join the effort.

Oracle stands as one of the largest data center operators in the United States. Although Oracle is based in Austin, it announced plans to shift its corporate headquarters to Nashville last April.

Softbank, a Japanese investment conglomerate, brings substantial financial resources to support the expansion of AI infrastructure. Reports suggest that Altman met with Son to discuss plans for new semiconductor manufacturing facilities to produce AI chips. Altman has urged the federal government to take measures to maintain an advantage over China in the AI race through improved infrastructure.

“I believe this will become the most significant project of this era,” Altman remarked.

Recent years have seen a surge of data center development in Texas. A report by CBRE, a commercial services firm, noted that the combined data center activities in Austin and San Antonio under construction quadrupled in the first half of 2024 compared to the previous year. The Dallas-Fort Worth area ranks second in data center capacity across the nation, following northern Virginia.

Ken Fleischmann, a professor at the University of Texas School of Information, expressed to the American-Statesman that such a massive investment in AI infrastructure could significantly impact Texas, particularly in Austin.

“In what we now call ‘Silicon Hills’ in Austin, we have become a leading hub for AI innovation both nationally and globally,” Fleischmann stated. “This type of investment could further bolster AI innovation in Austin and positively impact Texas’s economic status and national profile.”

AI Regulation: What’s Happening?

Fleischmann, who also established Good Systems: Ethical AI at UT Austin, stressed the importance of regulation in this arena.

“Often with technology and especially AI, we’ve been reactive,” he stated. “We’ve seen this with social media where technology advances and we end up addressing the consequences after the fact. It’s crucial to be proactive about AI.”

On his first day in office, Trump rescinded President Biden’s 2023 executive order that laid out guidelines for generative AI.

Generative AI can produce diverse content—like text, images, and videos—from open-ended prompts, contrasting with traditional AI designed for specific tasks.

Biden’s 2023 order, following insufficient legislative action to create safeguards for AI development, mandated that developers report safety test outcomes for AI systems posing risks to national security, the economy, and public health. The order also called for federal agencies to set testing standards and address various risks, including those related to chemicals, biological threats, and cybersecurity. The Republican Party sought to overturn this order, arguing it inhibits AI advancement.

Biden signed another executive AI order on January 14, which aims to enhance the infrastructure necessary for advanced AI operations in the United States. Trump has not rescinded this order.

Fleischmann believes states should act independently of Congress to establish their own AI regulations.

“It’s sensible for Texas and other states to enact appropriate laws that address AI at a state level in the meantime,” he commented. “If several states regulate AI individually, it could lead to a collective approach that informs the federal government’s strategy.”

State Representative Giovanni Capriglione, R-Southlake, introduced a significant AI regulation bill known as the proposed Texas Responsible Artificial Intelligence Governance Act last December.

The bill aims to create regulations and guidelines for the development, usage, and distribution of “high-risk AI systems.”

Key Points from Capriglione’s Bill:

• Mandate that companies disclose their use of AI systems and clarify their applications.
• Establish guidelines to combat bias, discrimination, and improper use of AI.
• Create protections for personal data utilized in AI systems.
• Promote educational programs to better prepare Texas workers for an AI-driven economy.
• Ensure free speech protections and prevent censorship in lawful political discussion.

Central Texas Data Center Developments

Earlier this month, Trump announced that DAMAC Properties, a developer from Dubai, plans to invest at least $20 billion “within a short timeframe” in data centers nationwide, including in Texas.

At that time, a Texas expert on electric system reliability voiced concerns, warning that the greater Austin area might struggle to support such extensive data center developments within the next five years.

“Although data centers can be built quickly, we lack the ability to develop new electricity generation and transmission systems as rapidly,” said Alison Silverstein, a former board member at the American Council for an Energy Efficient Economy.

For context, the Electric Power Research Institute noted that requests for AI applications like ChatGPT may require tenfold the energy of traditional Google search queries.

Fleischmann emphasized that the power grid’s vulnerabilities revealed during the February 2021 winter storm raised significant concerns about Texas’s energy capacity.

Major investments in AI infrastructure and the establishment of data centers in Central Texas could be immensely advantageous for the state, particularly Austin.

Nonetheless, Fleischmann advocates for further dialogue and cautious planning so that local residents are not adversely affected by these developments in energy systems.

“We could have data centers catering to global generative AI needs, alongside local residents in Austin. This could lead to complex trade-offs,” Fleischmann noted. “Although contracting and maintaining such data centers could open up job opportunities and bring in high-tech employment to Austin, we must also consider the potential environmental consequences and implications for emergency management.”