Stargate live updates: OpenAI's Altman says 'people are right to be anxious' about AI

Bank of America co-president James DeMare said the buildout for data centers doesn't seem to be stopping anytime soon, and they are "looking at things every week."

DeMare said the scale varies considerably and "there aren't a lot of firms that have the skill or the capacity to do it."

"Someone may have access to the chips and they're looking for land and power, could be vice versa, someone's got land or power, but they're not in the business of developing data centers, they want to be partnered up with people," he said.

—Chris Eudaily

Michigan Gov. Gretchen Whitmer insisted that the data center buildout in the U.S. can be done "smart" and that her state can show the world how it can be done.

"In Michigan, I think we've, we've hit the right balance when it comes to moving forward on projects like this and doing it ethically," she said.

Whitmer said the closed-loop water system used in the Stargate project would use "less than what a farm land in the same footprint would have required" and noted that jobs and energy were also areas of concern for her.

The governor said Stargate would put more energy on the grid and help bring down rates for customers in areas where utility DTE Energy operates.

—Chris Eudaily

OpenAI and Oracle announced a series of community commitments as part of the groundbreaking event on Monday.

The company said the project is expected to generate roughly $1 billion in tax revenue over the course of the lease, which includes support for "local, county, and state schools and services" in the community, according to a blog post.

OpenAI, alongside Oracle, Related Digital and other partners, also agreed to contribute $10 million to the Saline Recreation Center, the company said.

"The City of Saline identified the rec center as a community priority, and this investment supports a project shaped by the community itself," OpenAI said.

OpenAI said the infrastructure and energy needed for the site will be paid for by the project, and that those costs will not be passed on to consumers and local ratepayers. Additionally, they said the site relies on a closed-loop cooling system that uses about as much water as a typical office building.

The company is also making roughly $45 million in credits for its AI coding assistant Codex available to more than 400,000 eligible students in Michigan for the 2026 through 2027 academic year.

—Ashley Capoot

Altman talked up how AI systems will get smarter and more helpful over time, enough that they could function as an always-on application that helps users with everyday tasks.

"Right now you still send a request to an AI, and it does something for you and gives you an answer back," he said. "But very soon, an AI will just be running for you in the background all the time, helping you with your job, looking at all your information, aware of all your context, doing as much as it possibly can to help you out."

He gave the example of his own work, where an AI application could analyze large amounts of internal information, like documents or Slack threads, summarize that information and provide users with "advice" on what's important.

That use case is one of the reasons why OpenAI is focused on building infrastructure, Altman said.

"I can already tell in that world, I and everybody else is going to want so much more of this AI infrastructure than we think," he said.

—Annie Palmer

For years, the U.S. has raced against China to build better AI models, and the U.S. government has limited certain chip exports to the nation due to national security concerns.

But Altman says treating the mounting competition as a race is a potentially slippery slope.

"I think in some ways that's okay, and in some ways that's really dangerous," he said. "I think it's fine to say, 'Hey, we're going to win this, we're going to have, you know, most of the economic benefit.'"

Altman says there are certain instances in which nations will need to collaborate on AI.

"On the really big things, making sure we don't ever lose control of AI systems, cyber security, biosecurity —I think we need to not treat this as a race and treat this as a good future of the world is in everyone's interest."

—Samantha Subin

Altman said the AI industry needs to improve its messaging to combat backlash over the tech's impact on society.

"I think we have failed to articulate as an industry how people stay in control of determining the future at every step, and have a really meaningful life in all the ways we care about," he said.

His comments come as concerns mount over the possibility of AI replacing jobs and worries that the tech is moving too quickly.

Altman called these concerns a "huge challenge" for the industry, but said it's a good thing that society is somewhat reluctant to rapid change.

"I have no interest in AI that accomplishes some non-human goals," he said. "This has got to be about something that is working for people, and that people are at the center of it, and human values are what we drive forward."

—Samantha Subin

Altman said building data centers in space is not a short-term priority for OpenAI.

"I hope that humanity expands to the stars someday, and data centers along with it, but we're going to focus on building on Earth for now," Altman said.

—Ashley Capoot

Altman said he "just heard" that OpenAI rival Anthropic confidentially filed its IPO prospectus with the SEC, and that he does not think there is a race to be the first AI company to hit the public markets.

"I think there is a race to deliver the best technology and build the best business, but, you know, going public is a financing event, and I don't think that's one that we're focused on the timing of," Altman said.

He said OpenAI will IPO when it makes sense for the company.

—Ashley Capoot

Altman said he is "not sure" how AI will ultimately impact jobs, but noted he thinks "people are right to be anxious."

"The companies that I know that have adopted AI the most are also the ones hiring the most, and the companies, as a general rule, that are talking about doing layoffs because of AI are the ones adopting AI the least," Altman said.

He added that he thinks the AI industry "underestimated" how much people will remain at the center of "everything and an economy that is in a world that is based on people."

--Ashley Capoot

OpenAI's Altman told CNBC that the artificial intelligence firm is "very confident" that the more than $45 billion investment in Stargate Michigan will drive returns for partners because of demand signals.

"One gigawatt is a huge amount of compute, but we understand what demand looks like and how much people want to use these models, and the degree to which revenue is ramping at our company and the industry, he said.

Many people, he said, are depending on the project for future research programs and projects.

— Samantha Subin

Oracle's Magouyrk said he understands much of the public concern around AI, but that he remains optimistic about the technology's potential to benefit society.

"I think in times of great change it's very easy to be fearful, and I don't have all the answers," he said.

Magouyrk added that he's witnessed the development of several new technologies over the course of his career, and as long as they're used responsibly, they can be a "huge benefit to our people."

"I don't see any reason that this technology is any different," he said.

— Annie Palmer

Magouyrk said development of the massive Stargate project is "on schedule" or ahead of expectations, and Oracle is "very rapidly" building out one of the sites located in Abilene, Texas.

"What I can say is that based on all of our expectations, both in terms of the construction process, the permitting process, power generation, GPU delivery, all of it's actually going, you know, on schedule or ahead of where we expected it to," he said. "You see that in terms of what we're delivering to our customers, and also the commitments that we're making to our investors and our partners."

The ambitious project was announced in partnership between Oracle, OpenAI and SoftBank in January 2025. Six Stargate campuses spanning Texas, New Mexico, Wyoming, Wisconsin and Michigan are expected to be underway by the end of this year.

Oracle stood up the first couple of buildings at Abilene late last year, Magouyrk said.

"It's eight buildings in the original Abilene site, and we've delivered another couple of those right now, so that's moving very fast," he added.

— Annie Palmer

Software stocks have sold off this year as worries mount that artificial intelligence tools will massively disrupt the companies' business models.

Magouyrk brushed off those fears, telling CNBC's Faber that Oracle is using AI to its benefit, but companies that don't incorporate the tech are at major risk of disruption.

"I think there's a risk if you're not using the technology to make your products better, right," he said. "The good thing is that at Oracle, our customer base and our existing technology are not a liability; they're an asset."

Oracle shares briefly suffered this year as disruption concerns rattled market sentiment, but have since recouped those losses, rising 26% since the start of the year.

"The fact that we can use AI, and then go in, revolutionize how we're delivering those applications, and then deliver it to those customers very quickly — that's actually an advantage, not a disadvantage," he said.

— Samantha Subin

"There is more demand today than we can deliver," Magouyrk told CNBC.

The Oracle CEO repeatedly referenced the sustained demand for AI and said the technology is "critically important" for the success of the U.S.

"The quicker that we can actually build and scale it, I think it's going to be better for all Americans," he said.

—Chris Eudaily

The Stargate Michigan project is expected to cost an initial $16 billion, but Oracle's Magouyrk said other components will cost even more as artificial intelligence inferencing accelerates.

"It's going to be an additional $30 billion to $40 billion to put everything inside of it, in terms of the networking, the GPUs, all that kind of stuff," he said. "Then that stuff obviously gets replaced over time."

Magouyrk said the cost for infrastructure inside data centers is much more expensive than the buildings that house these tools and have a far shorter lifespan.

— Samantha Subin

Softbank Group announced over the weekend that it will invest $53 billion over the next five years for AI infrastructure in France, part of a larger program to reach 5 GW of data center capacity in the country.

The first phase is for 3.1 GW of AI data center capacity in the northern Hauts-de-France region by 2031, with data centers in Dunkirk, Bosquel and Bouchain, according to a release.

The France buildout marks the company's largest AI infrastructure investment in Europe and CEO Masayoshi Son told CNBC that he expects AI surge to be magnitudes bigger than the dotcom boom.

"I think this is like more than 10x, probably 50x bigger than dot-com," he said.

—Chris Eudaily

Related Digital is a subsidiary of a larger real estate firm that has worked on massive projects like the Hudson Yards neighborhood in New York City.

Blau said Related Digital has gone through a "technology learning curve" as it's built out its data center business, and that the company has brought on "real technology experts to help."

He said the "fundamentals of execution and development and construction are the same."

--Ashley Capoot

Asked about growing public backlash to AI data center development, Blau suggested, without evidence, that some of the opposition may be coming from "paid protesters" supported by foreign actors like China.

"I also think, just to be very clear about this, not all the opposition is local," Blau said. "I mean, we are seeing, and it's very interesting, that we're seeing opposition bused in, effectively, to these data center sites. And it's not very clear where the capital and the funding and the support for these opposition groups comes from."

He said the Trump administration is "taking a real look at" whether foreign groups may be assisting with efforts to block data center projects. The White House didn't immediately respond to a request for comment.

When asked directly if he was suggesting China was part of that pushback, he said, "It could be."

He added that China could be supporting grassroots opposition efforts as a means of slowing AI development in the U.S.

Rapid construction of AI data centers, which can span hundreds of thousands of square feet, have sparked widespread backlash among many Americans. A May Gallup poll found that 71 percent of Americans oppose the construction of AI data centers in their community.

Communities have cited concerns about the massive amounts of water and energy required to power and cool such facilities, worsening air quality and noise pollution in surrounding areas, along with inflated electric bills and whether promises of job creation will materialize.

Cities and counties across the country have recently passed moratoriums to temporarily halt new data center projects and allow for more research into their impacts so that legislators can establish guardrails. Lawmakers have also looked to limit or repeal incentives tied to the projects, or pushed developers to disclose water and energy usage at the sites.

— Annie Palmer

Blau said Related expects to deliver Stargate Michigan at the end of 2027 and to "start seeing cash flow immediately after that."

"High-rise buildings, as you know, take three or four years, so this is actually much faster," he said. "It's got a great return profile for us and our investors."

The massive real estate firm is widely known for developing New York's Hudson Yards and has a stake in Equinox fitness clubs.

— Samantha Subin

As OpenAI, Oracle and other tech companies have committed to pouring billions of dollars into data center buildouts, they've faced fierce pushback from many local communities across the U.S.

At least $156 billion in data center projects were blocked or delayed amid local opposition and litigation last year, according to a report from Data Center Watch. 

The Stargate project in Michigan faced substantial opposition. The board in Saline Township initially voted four to one against the data center project. Related Digital sued the township, and the project moved forward after the case was settled.

"This is where Related uses its decades of experience in working with communities and kind of building responsibly," Blau said.

Blau acknowledged that communities are concerned about data centers taking local water supply, but said Stargate will use a "closed-loop cooling system" that will use less water than farmers.

"We are preserving open space," he said. "So we're on a site of almost 700 acres, more than half of that is being preserved forever as farmland, and so there's, there's lots of ways we are making contributions to the fire department and the rec center here."

--Ashley Capoot

Blau said the company is building the infrastructure that will underpin the sprawling Stargate Michigan datacenter project.

That includes power substations, data halls and power cooling, chips and racks, he said.

"Oracle will take it from there, and they will invest substantial dollars past our $16 billion," he said

— Samantha Subin

The Stargate site in Michigan was announced late last year, and Related Digital said in a release that it will be developed on 250 acres of land in Saline Township, which is located southwest of Ann Arbor in Washtenaw County.

The project consists of three 550,000 square foot single-story buildings, and was dubbed "The Barn" because of the red barn that marks the entrance to the site.

—Ashley Capoot