President Trump declared a $500 billion investment from private companies in American AI infrastructure

Trump Change or Chump Change?

Standing next to some of the world’s richest men, President Trump declared a $500 billion investment from private companies in American AI infrastructure. Dubbed “Stargate” and hailed as the next Manhattan Project, the money is earmarked for physical buildings, data centers, electrical supply, and jobs needed to power AI advancement and function. The goal: fund US dominance in the next frontier.

This is no Trumpian hyperbole; it’s chump change. Analysts at Blackstone expect over $2 trillion to be invested in AI over the next five years. Stargate currently has $100 billion in commitments from Softbank, Oracle, Microsoft, and UAE’s MGX, with scale-up to $500 billion on tap in four years.

CEOs’ toothy grins aside, a small tantrum was brewing in Elon Musk’s corner of X. “They don’t actually have the money,” Musk wrote, calling OpenAI CEO Sam Altman a swindler. “SoftBank has well under $10B secured.”

Musk, who initially partnered with Altman on ChatGPT, has since parted ways and filed suit.

5,000 Megawatts…

…or 1% of total US energy use, is the power needed for 2.7 million humans. It’s also the amount of power capacity that needs to be added to the US energy grid this year just to run AI applications.

Why is so much physical construction needed? AI models feed off enormous volumes of two commodities: data and power. Machine learning is driven by analysis of massive data sets; development has actually slowed because hungry bots have gobbled up the whole Internet and are still hungry.

OpenAI cofounder Ilya Sutskever said “there’s only one Internet” to scrape for data. Estimated data consumption in 2025 will reach 200 zettabytes, more than double the amount used in the pre-ChatGPT era of streaming content and creation. Stargate will build clusters of data centers, each boasting 500,000 feet of floor space across the US. Ten are already planned in Texas.

The US power grid needs a spark, too. A single chatbot query burns ten times the power of a Google search; image generation, 50 times; and a video, 10,000 times. That’s 120 complete charges from your phone.

$21 Billion

The current US government stockpile of cryptological assets. Biden wanted to sell it off; Bitcoiners hoped Trump would grow it; for now, neither is likely.

“Proceed with extreme caution… or not.” That philosophy wraps up the Day Four executive order from the new pro-crypto president.

The order established President’s Working Group on Digital Asset Markets to study federal strategy for regulating e-currency, and to think carefully about deepening a federal reserve. While it’s a hard right turn from Biden-esque policy of enforcing classic SEC rules, restricting crypto development, and shifting blockchain technology to federal reserve dollars; it’s not quite what crypto-heads were hoping for.

The EO does recognize that “the digital asset industry plays a crucial role in innovation and economic development in the United States, as well as our nation’s international leadership,” and sets a tone by including crypto-companies in conversations to figure out regulations that work to move the industry forward.

$TRUMP

The meme coin Trump named after himself, released on his last day as president-elect. The $10 price of the token spiked to $70 on Inauguration Day. Trump associate company CIC Digital, holding 80% of the 200 million initially released, made about $50 billion overnight — with plans to sell another 800 million coins. The price has since leveled out to about $35, meaning most regular Joes (Dons?) in Trump nation lost a few hundred bucks. $MELANIA didn’t do as well, plummeting from $13 to just over $2.

A meme coin is a way to actually sell 15 minutes of fame. It literally is nothing, and has no value other than someone else’s willingness to “buy” a virtual piece of it. Thousands of meme coins are launched every day, most with no value. Some capitalize on a flash of pop-culture craze to climb in value — which can push them to greater value. Founders hope to cash out before they crash, like penny stock pump-and-dump schemes.

The questionable ethics of a president using his popularity to milk penny investors is obvious. Crypto analyst Justin d’Anethan said, “While it’s tempting to dismiss this as just another Trump spectacle, the launch of the official Trump token opens up a Pandora’s box of ethical and regulatory questions.”

The Trump camp insists buying the meme is just a way of celebrating the win and joining Trump Nation. Either way, as Felix Salmon, chief financial correspondent at Axios, put it: “Trump has just delivered a masterclass in the ability of a president to turn power into wealth.”

$GELT, anyone?

Ticked Its Last Tok?

The art of the deal is on full display in the saga surrounding TikTok, 170 million users of which just helped Trump get elected.

The law required web hosting services and app stores to stop carrying the TikTok app on January 19. CEO Shou Zi Chew chose to shut down the app completely, putting pain on users. President Biden paused implementation, essentially passing the buck, while the Supreme Court shrugged and said, “Don’t look at us.”

All of which leaves it to Trump to find a solution. He bought some time by putting a 75-day hold on enforcement, and proposed China and US going halfsies on the app; although the law passed by Congress explicitly forbids any Chinese stake in its US operations at all. For now, the app is back up and running, although Shou Zi is playing it savvy; it still can’t be downloaded from app stores in the US.

Government officials are banned from using TikTok since 2022. But national security risks still abound — Congress has identified a triple threat. Through the app, the Chinese government is aggregating massive amounts of data on the habits, sensibilities, and vulnerabilities of young people in the US.

This is the long game — in 20 years, that data could help our adversary manipulate the minds and hearts of Americans. It can also assist China in identifying potential informants and intelligence assets. Now, the app makes sure pro-PRC content rises to the top of feeds. And most insidiously, dangerous spyware can be piggybacked with any download of the app.

(Originally featured in Mishpacha, Issue 1047)