The race to raise bigger capital for AI capex in this AI Tech Wave accelerated this week, with the two leading LLM AI companies putting more AI infrastructure chips on the table.

OpenAI, the leading AI company, redefined the Stargate AI infrastructure project that I discussed last year, with a new set of mega-investors beyond Microsoft. And Anthropic, announced more capital from Google, who was already in for big investments along with Amazon AWS. Both developments need a bit of unpacking for the broader context.

As Axios explains in “OpenAI, SoftBank in $100B data center deal”:

“President Trump on Tuesday announced billions in private sector investments to grow artificial intelligence in the U.S. and build massive new data centers for OpenAI.”

“The big picture: OpenAI, SoftBank, Oracle and the UAE's MGX will convene under a joint venture called Stargate, and will commit $100 billion to start, with a potential of up to $500 billion over four years.”

• “The new company will create more than 100,000 American jobs, Trump said.”

• “Stargate will open a data center project in Texas and later expand to other states.”

• “SoftBank CEO Masayoshi Son, OpenAI CEO Sam Altman and Oracle founder and chairman Larry Ellison appeared with Trump at the White House for the announcement.”

• “Son will serve as the company's chairman, according to an Oracle press release.”

• “Arm, Microsoft, Nvidia, Oracle and OpenAI are the initial technology partners, per the release.”

• “The first project slated involves several new data centers near Austin, Texas.”

“Our thought bubble: Trump will take credit for these spending commitments, but the rush to build AI data centers has been building for two years, and this money would likely have flowed regardless of who occupied the White House.”

Anthropic also had a big capital raise, as the Information outlines in “What Anthropic and Stargate Have in Common”:

“The term “bottomless pit of need” usually refers to an insecure person, but it could also apply to artificial intelligence startups, with their insatiable appetite for cash. Take Anthropic, one of OpenAI’s biggest rivals, which the Financial Times reported on Wednesday was raising $1 billion from Google. Just two weeks ago, we reported Anthropic was raising $2 billion from venture investors, and in November Amazon pumped $4 billion into the company.”

“Including Google’s latest billion and the venture funding round underway, Anthropic appears to have raised $14 billion since the fall of 2023, including $6 billion previously invested by Amazon and Google. The firm isn’t throwing cash out the window: Developing new AI models is horrendously expensive, reflecting the intense amount of computing involved and the cost of the specialized AI chips needed to handle those chores.”

Another interested party in all this of course is Elon Musk, with his own ambitions to build some of the biggest AI data center infrastructure for his xAI venture, and couldn’t resist weighing in on the OpenAI/Softbank Stargate venture:

“The massive costs of AI development were spotlighted separately by the as-much-as $500 billion Stargate venture unveiled by President Donald Trump, OpenAI, SoftBank and Oracle on Tuesday (enlivened by Elon Musk’s comment on X that the companies involved in Stargate don’t have the money needed.)”

And that got a quick response from OpenAI’s founder/CEO Sam Altman:

“While OpenAI Sam Altman countered that Musk was wrong, exactly how Stargate will come up with even the first $100 billion is a puzzle. We got more details tonight, when The Information reported that OpenAI is on the hook for $19 billion of the total, which is a staggering amount for a firm that has raised itself only around $24 billion in its life, as calculated by PitchBook. SoftBank has to come up with a similar amount, while Oracle and another investor, Abu Dhabi fund MGX, will put up $7 billion between them.”

Besides the drama and shock value of these announcements, there is a fair bit of behind the scenes industry nuance to understand for those interested. I’d recommended some of these other discussions for deeper dives.

But the broader picture is that this AI Tech Wave is seeing a meaningful acceleration in putting money to work to truly Scale AI. And it’s all just still barely begun. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)