Title: The Half-a-Trillion-Dollar Communique to China: Shaping the Future of AI Regulation
President Donald Trump just announced Stargate, a significant AI investment project worth $500 billion, backed by SoftBank, Oracle, MGX, and OpenAI over the next four years. Let's break it down:
OpenAI, the AI research organization, has score a major victory – landing Stargate as a major client. SoftBank will handle the financial side of the deal, while Oracle will supply the necessary infrastructure for OpenAI's AI services. This decision is great news for OpenAI, as creating AI models can be costly, and open-source AI is gaining momentum fast. OpenAI's only chance to stay ahead is by securing exclusive access to data and users. As I mentioned in "The Race for AI Agents," for a company to dominate AI agents, it needs access to vast amounts of data and enterprise resources. OpenAI and Oracle are currently lagging behind in these aspects. This partnership sends a clear message.
The message to China is clear: "We'll catch up, and we'll outperform you." For Trump, this message is aimed at China. However, others, including Elon Musk, also heard it. Despite missing his AI lead, Musk attempted to catch up through lawsuits and ethical arguments. Musk dismissed the project as half-cooked. In response, Sam Altman, the CEO of OpenAI, essentially said, "Wrong." He urged Musk, in his new role, to prioritize America's interests above his company's.
Now, let's consider why they chose the White House backdrop for this announcement. Stargate is not just about OpenAI versus Musk's Grok; it is about who will rule the global tech market and maintain their hegemonic power. AI will transform multiple industries, and whoever dominates AI will shape the world's power structures. In 2019, I warned that China's aggressive data collection strategy would give it a long-term AI advantage over the U.S. Today, the gap between the two countries seems to have narrowed sharply.
Take the latest development in AI reasoning, for example. In 2024, I predicted that "AI reasoning will be the main development." By the end of 2024, Sam Altman claimed OpenAI had figured out how to build reasoning AI agents. I explained the process in "The Battle of Tech Giants": OpenAI's model, called "o1," uses an iterative, self-calling process for reasoning. However, within less than 60 days, China had caught up. DeepSeek's R1, a Chinese AI model, employs the same self-critique and iterative learning method, producing remarkable results.
This Chinese AI model is open-source, which means startups can experiment with it, indirectly aiding China in its quest to challenge U.S. AI dominance. The irony is, this is happening despite U.S. attempts to prevent China from accessing AI technology. With China pushing ahead and the U.S. making substantial investments, the AI race is far from over. The fundamental question remains unchanged: It's not about having the best AI; it's about controlling the data and building products that businesses and people actually use. The AI journey is just beginning.
In addition, Trump will also roll back some of Biden's AI regulations. Biden's Executive Order 14110, which imposed AI regulations, has been criticized as ineffective. As I mentioned in "Biden's AI Plan," the White House seems to believe that AI can be controlled like nuclear weapons, but it's not that straightforward. And clearly, it wasn't. The regulations didn't prevent OpenAI or China; instead, they may have accelerated their efforts to innovate. With the AI race wide open, whoever can control data and build usable products will be the one to reign supreme.
- Lutz finger, an AI researcher, expressed his concerns about Trump's announcement, stating that while the investment is significant, it could potentially escalate the 'China vs US AI race' further.
- SoftBank's involvement in Stargate AI investment also caught the attention of Lutz finger, who suggested that this partnership might disrupt the balance in the global AI market and could sway the control of AI technology towards the US.
- Elon Musk, despite his criticism of Stargate as a half-cooked project, has shown interest in investing in startups working on AI reasoning, a move seen as his strategy to stay competitive in the AI race against OpenAI and other players like DeepSeek from China.
- The Chinese AI startup, DeepSeak, which developed an open-source reasoning AI model (R1), has received funding from SoftBank, further highlighting the role of venture capitalists like SoftBank in shaping the AI landscape and deepening the competition between the US and China in the AI race.