- President Donald Trump backs Project Stargate, a $500B AI venture with OpenAI, Oracle, and SoftBank.
- China’s DeepSeek launches AI models rivaling OpenAI, intensifying the US-China AI race.
- Trump repeals former president Joe Biden’s AI order, signaling deregulation in AI policy.
Since President Donald Trump took office Monday, he’s quickly made moves on advancing AI.
At the same time, the US can’t rest in the AI arms race as China launches new, advanced AI models.
Here’s a quick rundown on the biggest news in AI.
- The Trump administration and tech companies launch Project Stargate
The biggest news: Trump administration announced Tuesday its backing of Project Stargate, an AI venture led by OpenAI, Oracle, and SoftBank to invest billions into building American AI infrastructure.
Project Stargate plans to invest $500 billion over the next four years to build new AI projects in the US, including 20 new data centers, starting in Abilene, Texas. OpenAI has said it will deploy $100 billion “immediately.”
Stargate aims to help position the US as an AI leader, create 100,000 jobs, and increase national security as the US gets into an AI arms race with China (more on that below). OpenAI CEO Sam Altman has also said it will allow the US to achieve artificial general intelligence.
SoftBank will have “financial responsibility” over this project, while OpenAI will have “operational responsibility.”
Arm, Microsoft, Nvidia, and Oracle will also offer technology support, while OpenAI, Oracle, and the Abu Dhabi tech fund MGX (which has invested in OpenAI) will provide additional financial support.
“Stargate adds fuel to the narrative that we are still early in the capex buildout required for AI and signals that the new administration is likely to be highly supportive of the investment and energy requirements of the AI platform shift,” William Blair analysts wrote in a note.
Microsoft also announced a new partnership agreement with OpenAI. While the tenants are similar to much of the original agreement and includes a “‘new, large Azure commitment” to support OpenAI products, it allows OpenAI to use other cloud providers while Microsoft has the right of first refusal for OpenAI’s computing capacity.
At the same time, Stargate will drive up demand for energy, and OpenAI is already starting to solicit interest from construction, power, and equipment providers to build out infrastructure. President Donald Trump has said he wants to make it easier for AI developers to have access to electricity for powering data centers and to build power plants.
“The Trump administration’s involvement in Stargate underscores what is likely to be a friendlier, more accommodative administration that will work to ensure energy availability and remove stringent regulations that may slow down the buildout of large-scale AI infrastructure across the US” William Blair analysts wrote.
Elon Musk, founder of xAI and co-head of the Department of Government Efficiency, is notably not included in the lineup of companies involved with the Stargate project. Musk voiced concern about SoftBank’s ability to uphold its financial responsibility for the project.
- OpenAI has a formidable rival from China: DeepSeek
On Monday, the Chinese startup DeepSeek released a family of open-source AI models called DeepSeek-R1 — a warning shot from China as Trump begins his term. DeepSeek first launched the preview of this model in November, and it’s similar to OpenAI’s o1 series of AI models.
DeepSeek also published a report that said its R1 model is “comparable” and even outperforms OpenAI’s o1 in several math, reasoning, and coding benchmarks.
What’s more, DeepSeek is much cheaper to use. Its open-source models are free, while access to the DeepSeek R1 API costs a small fraction of what OpenAI charges.
OpenAI offers unlimited access to its o1 model through ChatGPT Pro for $2,400 a year. If DeepSeek or any other open-source AI model offers similar capabilities for free, then it poses a challenge to AI companies that seek to profit from selling their technology.
This launch shows that China is still a formidable competitor in the AI arms race, keeping up with Silicon Valley and, in some cases, even surpassing it. At the same time, concerns about the Chinese government’s censorship have already arisen. For example, R1 won’t answer questions about Tiananmen Square or Taiwan’s autonomy. Given the political risks, American companies may not be able to use the R1 model in their products.
Meanwhile, OpenAI is getting ready to launch its next-generation model o3.
- Trump repeals the executive order on AI
On Monday, Trump also repealed former president Joe Biden’s 2023 executive order on AI, ushering in a deregulation of the technology.
The executive order aimed to reduce AI risks and required companies that train advanced AI models to disclose details about them, including the results of safety testing, to the federal government. It also directed agencies to set standards for testing and address any risks.
Trump has long criticized this executive order. He also rescinded nearly 80 other executive orders. One AI executive order from Biden that Trump notably did not repeal called for federal support to ensure power for AI data centers.
It’s still unclear how Trump will handle other AI issues, including restrictions on AI chip and technology exports, export controls on AI models and addressing how much information AI developers should provide to the government.
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