🧊 Investors cool on OpenAI’s stargate?

Tuesday’s AI Report

• 1. 🧊 Investors cool on OpenAI’s stargate?  
• 2. 💹 Private stock tracker by PM Insights, click for deeper insights
• 3. 💼 Become an AI consultant with Innovating with AI
• 4. 🤔 Saudi launches AI for Trump
• 5. 📉 AI progress stalling?
• 6. 🤖 Find out what AI can do for your business with Upscaile
• 7. ⚙️ Trending AI Tools
• 8. 🏗️ Practical AI Applications
• 9. 📑 Recommended Resources

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Investors cool on OpenAI’s stargate?

🚨 Our Report 

OpenAI announced the ambitious $500B Stargate data center project (which aims to build advanced AI infrastructure in the US and overseas) with Japanese tech giant Softbank in January. However, thanks to a combination of rising tariffs, market instability, cheaper AI models, and investor uncertainty, the initiative is facing major delays, which could force OpenAI to revise or even reverse its major AI infrastructure plans.

🔓 Key Points

• Funding talks (to raise the $500B needed to advance the project) with key investors like JPMorgan, Apollo Global Management, and Brookfield Asset Management have happened, but none have moved forward.

• Trump’s tariffs—specifically on server racks, specialized AI chips, networking software, and cooling systems—could increase build costs by 5-15%, making investors more cautious.

• Investors are also concerned about overcapacity as cheaper alternatives (eg, China’s DeepSeek R1) come onto market, and big tech giants like Microsoft and Amazon pull back on their data center plans.

🔐 Relevance 

Although Softbank was initially one of the first to express interest in funding Project Stargate, and has reportedly assembled a team of 30 to focus exclusively on advancing the project, it’s failed to finalize a financing framework or start detailed negotiations with other potential backers. Without this, the project—no matter how high-profile—may not take off.

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🚨 Our Report

Saudi Arabia’s Crown Prince and ruler, Mohammed bin Salman (also called MBS) has launched an AI company—Humain—right before President Trump arrives to discuss AI (among other things) at a US-Saudi funding forum, which AI leaders such as Elon Musk, Jensen Huang, Mark Zuckerberg, and Sam Altman are also expected to attend.

🔓 Key Points

• Humain will build AI infrastructure across Saudi Arabia and develop “the most powerful multimodal Arabic large language models,” as it positions itself as a global hub for AI, and aims to become a global AI leader.

• The company will be chaired by MBS, led by former Aramco Digital and Rakuten executive, Tareq Amin, and funded by Saudi Arabia’s sovereign wealth fund (called the PIF).

• Altman and co could be looking to sign agreements with Saudi Arabia to leverage the PIF, as companies like Google and Salesforce have recently worked with the PIF on AI-related projects.

🔐 Relevance

This initiative is part of Saudi Arabia’s ambitious “Vision 2030” reform plan, which aims to diversify the country’s economy as it tries to move away from oil, as the world faces a future without it. It’s desperate to encourage tech companies to leverage its abundant energy resources to build AI data centers, and has already signed deals with chipmakers Groq and Cerberus, and cloud providers, Google and Oracle, over the last year. However, strict AI chip tariff restrictions, which were imposed after Biden feared that advanced AI chips were being smuggled into China from Saudi Arabia, may cause issues and are likely to be a point of discussion at the forum.

• Analysis by AI research firm, Epoch AI, has revealed that the development of AI reasoning models—capable of reasoning through tasks without human input—is likely to slow down within a year.

• The report establishes that performance gains from reinforcement training (which is how reasoning models are trained) are growing tenfold every 3–5 months (standard AI training is quadrupling every year).

• However, it concludes that this progress will “probably converge with the overall frontier (standard training methods) by 2026,” citing high overhead costs for research as a key reason for the slowdown in progress.

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