By: Jessie Chuang
In his final days in office, President Joe Biden has laid the groundwork for the largest build-out of America’s AI infrastructure since the dawn of the internet age - an executive order on AI infrastructure and new Commerce Department controls on advanced AI systems.
President Donald Trump is elevating the “AI superiority of the USA” further. On Tuesday (Jan. 21, 2025), he presented a joint venture “Stargate” investing up to $500 billion for AI infrastructure from a partnership formed by Softbank, Oracle, and OpenAI, with Microsoft, MGX, Arm, and NVIDIA as partners as well. With an initial $100 billion earmarked for data centers and electricity generation in Texas, actually, this project has roots in the previous administration.
Just one week before that (Jan. 7, 2025), President Trump announced an investment of $20 billion by Emirati businessman Hussain Sajwani, founder and chairman of DAMAC Properties, aimed at constructing data centers across the United States.
Earlier Microsoft alone announced an $80 billion investment in AI data centers for fiscal year 2025 (which ends in June 2025). More than half of this investment will occur in the United States, underscoring Microsoft's confidence in the U.S. economy. In its America's Golden AI Opportunity presented, a three-part vision for American AI success. First, it advocates for substantial investment in leading AI technology and infrastructure. Second, it emphasizes the crucial need for comprehensive AI skilling initiatives to prepare the workforce. Third, it promotes the export of American AI to allies, fostering economic growth and global influence while outcompeting China.
Microsoft is also investing $35 billion in 14 countries to build AI and cloud infrastructure and partnering with the UAE's G42 to expand AI infrastructure in Kenya, as well as working with Blackrock and MGX to create a $100 billion investment fund. Big tech titans have been playing a bigger role in the AI arms race than VC/PE private investors. PE takes a pick-and-shovel approach in the AI gold rush.
Private capital funds have also poured over $100 billion into data centers in the last five years, and in 2024 alone, digital infrastructure deals reached $108.1 billion, more than three times the previous year (Pitchbook). The US now has more than 11,000 MW of data center capacity, and the number of data center operators has increased by 250% in the past decade. However, the vacancy rates have dwindled to as low as 1-4%, driven by surging AI and LLM adoption. (Data Center Knowledge)
The AI data center landscape has exploded in 2024, it might get even bigger in 2025. According to JLL’s 2025 Global Data Center Outlook, an estimated 10 GW capacity is expected to break ground across the hyperscale and colocation segments globally in 2025.
The AI arms race has turned into a race between countries from one between big tech companies, particularly between the U.S. and China. The Trump administration has overturned some Biden-era orders on AI safety standards. What aligns both presidents perfectly is prioritizing securing “AI supremacy of the USA”.
We believe the energy and sustainability demands driven by the AI infrastructure arms race would be the strongest opportunity in green tech. The implications for energy innovations and energy efficiency enhancement (advanced semiconductors, Si Photonics, ASIC chips, connectivity) are particularly significant.
Read more: 5 Opportunities to Watch and Capture in 2025 With Enventure