This investment, first reported by CNBC, is similar to one from December 2016, when Son pledged a $50 billion investment and 50,000 jobs. Through the company’s venture capital arm, the Vision Fund, SoftBank ended up investing about $75 billion, CNN has learned. The total number of jobs created, given the Covid-19 impact on the country’s employment, is more difficult to tally.
This year’s pledge will focus specifically on artificial intelligence and AI infrastructure, including energy, data centers and chips, a source familiar with the investment said.
OpenAI, Softbank and Oracle are planning a joint venture called Stargate, Mr. Trump said in a White House briefing. SoftBank CEO Masayoshi Son joined Mr. Trump for the announcement, along with Sam Altman of OpenAI and Larry Ellison of Oracle…
Executives from the companies are expected to commit $500 billion into Stargate over the next four years…Ellison said 10 data centers for the project were already under construction in Texas, and that more were planned.
Yup. I was reading the reports, thought “didn’t Musk just have some sort of dispute with Chat GTP?” Why isn’t all that money going into Musk’s pocket? What was that $200M “donation” supposed to buy for him?
Maybe Musk’s usefulness is at an end? Only one cook left in the kitchen?
I don’t think this is government money. This isn’t a federal investment - this is the President showing up to announce a big private investment. The software equivalent of showing up to the groundbreaking ceremony at a new auto plant or something. Part of the ceremonial part of the office of President - not him directing money to Son instead of Musk.
That said, the President does have a predilection towards keeping his subordinates on their toes and rivalrous amongst each other - so I’m sure he didn’t mind signalling to Musk that there are plenty of other billionaires in the sea…
Yes, I understand that. I generally look for how TNG, or Musk, can personally profit from it, like the proposal floated for TNG not enforcing the law Congress passed about TikTok, if TikTok gives him and his cronies half of the company.
Maybe there is a clause in the agreement that, whatever is produced, at the other company’s expense, can be used by Musk, for free. So Musk gets the benefit, without spending a nickle of his own loot.
Musk publicly criticized the announced partnership, so I doubt there’s anything in it for him. This looks like it was something that’s been in the works for a while, and probably without any input from the federal government. It appears the President just chose to use it as an opportunity to engage in a bit of the ceremonial part of the office, like any other big private plant opening or suchlike.
I just watch the press conference. Masayoshi said, “I offered $100 billion but Trump asked why not $200 billion so i came up with $500 billion. $100 billion to start and $400 billion over four years, your tenure as President.”
My first thought was a $500 billion white elephant. I was wrong, just a $100 billion white elephant if they stop in time.
The man attraction of high tech for an investor is Increasing Returns. What does that mean? You spend a $1,000,000 on the first copy of software. The second copy costs maybe $10 which you sell for $1,000. Sell one thousand copies and you break even. After that you become a billionaire. The old paradigm was Decreasing Returns. The first part of your land that you use grows great veggies. As you expand to the rest of your land the yield per acre drops and it takes more work to get less crop. There is a great illustration in high tech, the Wintel Twins. Microsoft wrote software, Windoze and Office. Intel had Fabulous Fabs. How did investors fare? A picture is worth a thousand words:
Fabulous Fabs cost tons of money destroying Increasing Returns.
Neural Network AI requires the equivalent of Fabulous Fabs. Why risk it? If you can monetize the AI then it is worth it. Do the numbers on Humanoid robots taking into account that they will be labor saving devices, meaning people out of jobs. That gives a good indication of what they might sell or rent for. BTW, IBM showed that renting them out is much more profitable but the Trust Busters made IBM sell the machines if clients wanted to buy instead of rent. Tesla does not need venture capital to fund the computer clusters. Tesla has the manufacturing know-how and infrastructure.
What about Stargate? Larry Ellison said that with AI a native American in a Reservation could find out how some doctor somewhere on Earth cured the disease a patient on the reservation had. Monetize that! As if Public Health was not bankrupt already.
It might work but I would not venture a penny on it.
Again, I don’t think there’s any “favors” involved here - from the press coverage, this is a completely private deal, and the President just used it as a chance for a photo op.
Musk has had a running feud with Altman and OpenAI for a while now - and they’re competitors against his xAI in what is a pretty cutthroat space for AI development. So it’s not surprising he’d have some negative take on it.
Eh - I think he’d cry anyway. He’s been feuding with Altman over OpenAI for quite a while. And if the OpenAI consortium has have a trillion dollars to put into AI development, that kind of puts the sector in a completely different league than his xAI effort. Or even Tesla - ~$20B per year profit is an amazing achievement, but it can’t fund capex at that level.
Exactly. My expectation for Musk (vacuuming) up to an openly EV hostile regime was that he figured to “win” government AI contracts that would dwarf the profits he makes form Tesla. But no. Here’s a huge AI program, and he isn’t, personally, getting anything out of it. What’s worse, his “bro” is publicizing the other bunch.
The cynic would say that Musk’s usefulness to TNG has passed it’s peak. TNG doesn’t want to share the limelight. So Musk is pushed into the shadow.
The feud between Musk and Altman is about OpenAI. The president’ wants the $500 billion deal. As I mentioned above, the $500 billion deal is iffy at best while Tesla’s is The Real Deal (TRD).
I’m keeping my NVDA position (when everybody Is digging for gold, it’s good to be in the pick and shovel business).
The Stargate initiative pledged up to $500 billion in investments in AI infrastructure such as data centers over the next four years. Of that, 25%-50% could be spent on advanced chips—an area where Nvidia is the clear market leader, Melius Research analysts led by Ben Reitzes wrote in a Wednesday note. “Well over $100B of this spend could go to NVDA… https://www.marketwatch.com/articles/nvidia-stock-stargate-blackwell-ai-chips-12666cdb?mod=mw_latestnews
It appears that the Japanese are not going to let China and Tesla rule the EV/autonomous driving world. This seems like a clever way of getting American AI technology for Japanese industries, with perhaps major impact on the auto industry.
Softbank also has a robotics division, which perhaps may be its biggest motivator to make this investment. https://www.softbankrobotics.com
We are preoccupied with China, but I wonder if we forget that there are other competitors. Don’t get me wrong, I am a believer in globalization as a means of creating a larger economic pie. But giving a foreign company access to cutting edge AI technology seems risky and may be counterproductive to US businesses over the medium term.
Jensen lauds Masa as the “only visionary” to have had “incubator/collaborator” relationships with THE leader of each tech step since 1990.
At about 17 minutes mark, they talk about the “network” of inter connected AI that Japan, and every sovereign, country needs.
They also talk about what an agent is relative to the apps n programs that came before.
Apps n software programs are “dumb” brute force.
Agents are THINKING.
Ie “intelligent”.
They describe the Agent that, in the future, each person will have, from birth, that is that person’s own personal assistant.
I been watching SoftBank since around 2010, especially when @ormontUS started mentioning the company. SoftBank is ALWAYS somewhere nearby when the boundaries of tech are pushed outward.
ralph
Edit to add:
Rene Haas, CEO Arm Holdings, says Masa/SoftBank owns a significant % or Arm. Arm is a significant supplier to AI Infrastructure.
The Stargate AI project is a massive infrastructure build out, if not THE largest in history.
STRIKE!
