Donald Trump’s Stargate venture fires starting gun on AI space odyssey and exposes Australia’s lack of vision

It seems Elon Musk has convinced Donald Trump that he needs HAL for his space odyssey.

Whatever the motivation. Trump has fired the bazooka on an AI space race, and Australia is in danger of being left in the dust.

The Donald has rounded up some new tech CEOs to develop a $US500 billion joint venture, named Stargate, that has echoes of the cold war.

This time the adversary is China.

“This monumental undertaking will . . . ensure the future of (the) technology,” President Trump said. “China is a competitor, and others. We want it to be in this country.”

While short on detail, Stargate will combine Japanese money via investment fund Softbank, US infrastructure via Oracle and OpenAI’s technology to build data centres and physical campuses in a bid to accelerate US dominance in the rapidly developing field.

President Trump, who had already rolled back guardrails on AI placed by the Biden administration, vowed to use emergency declarations to ease construction deadlocks and allow easier access to energy.

Stargate will see $US100b deployed “immediately” and up to $US500b will be invested over the next four years.

Texas, fast becoming the new epicentre of the US tech scene, will host the first project.

While some of the money was already earmarked by AI companies, this commitment by the US will supercharge what is already proving to be one of the most significant investments in human history.

Before this announcement, Goldman Sachs estimated there would be $1 trillion in capital expenditure on AI in the next few year. By comparison, the US spent $US5 trillion on defence in the Second World War.

Innovate or die

“The investment made by Trump should be a wake up call for Australia,” said Adrian Turner, a serial entrepreneur who spent a decade in Silicon Valley before returning to Australia to run Data61, the data science arm of the CSIRO until 2020.

Mr Trump has hit a reset button that usually only happens after a conflict, gazing ten years in to the future to a world where the scale of investment required to perfect the technology means “four or five credible platforms” will dominate.

“This isn’t business as usual,” Mr Turner said.

“AI is a general-purpose technology that will underpin every industry. If we don’t adapt quickly, we’ll fall behind. “

Mr Turner was in charge of Data61 when it led the development of the Government’s Artificial Intelligence Roadmap for Australia in 2019. It proposed the country could be an AI leader in natural resources and the environment, health, ageing and disability, and cities and infrastructure.

Prior to COVID, a team of Australian researchers won what is regarded as the AI Olympics held in Europe. Were it not for COVID, that conference would have been held here in 2020. That was a blow, Mr Turner said but a bigger issue was the dearth of investment that drove experts offshore.

“We’ve lost talent — some of the best AI minds have left the country. At one point, Australia’s AI research sector was highly respected globally, but that momentum has diminished,” he said.

But Australia can still benefit greatly from the rollout of the technology, particularly given the huge amount of energy required to power data centres.

The US Department of Energy predicts that power needs for data centres in the US could triple by 2030, to account for as much as 12 per cent of total US energy consumption, closing in on the amount of power consumed by all US households.

Eric Schmidt, the former CEO of Google, who has investments in 22 AI startups, including Anthropic, wrote in Project Syndicate late last year that “building a sustainable supply of power to drive the AI revolution is in America’s interest” and that “AI technology is so valuable, and so critical to US national security, that potential partner countries can only be those that share common interests and values.”

That spells opportunity for Australia.

While Mr Trump would prefer to get his energy for data centres from fossil fuels, plenty of companies have net zero commitments.

Commonwealth Bank, who announced late last year that AI agents could potentially handle 90 per cent of all customer queries, purchasing carbon credits to offset data centre emissions.

Robin Khuda, the founder of local data centre darling AirTrunk, which sold for $24b to global investor Blackstone last year, told The Australian he is a “big believer” in renewable energy and said clients were happy to pay a premium for it. He suggested Australia had an opportunity to capitalise on its energy abundance while nuclear was being developed as an option.

“Australia is a country where we have enormous land. We get a lot of sun. We get a lot of wind,” Mr Khuda told The ­Australian.

“If you look at some of the renewable projects, we can get this up and running much, much faster.”

Powering productivity

If Australia is to truly cash in on the AI opportunity, it must embrace the disruptive power of the new technology.

While Telstra is investing $700m over the next seven years to empower its workers, the greatest potential may be derived by for smaller, more nimble players who wouldn’t be tied legacy systems and a legacy workforce.

Mr Turner cites the example of bookseller Barnes and Noble, who thought they could compete with Amazon by launching a website.

“They didn’t realise that Amazon was completely re-architecting supply chains, driving new operational efficiencies, and offering infinite choice with the ability to drop ship on demand,” Mr Turner said.

“The conversation goes beyond AI driving operational efficiencies to AI completely restructuring the boundaries of industries, which can create efficiency and innovation simultaneously. Australia’s small business-dominated economy can leverage AI to compete globally, especially in applications and services rather than infrastructure,” he said.

Mr Turner is putting his money where his vision lies. After leaving Data61, he went back to startups, launching an AI-powered firm to ensure the biosecurity of Australia’s agricultural sector.

Spurred by the supply chain devastation wrought by COVID his company ExoFlare is processing hundreds of thousands of data points to try to identify and isolate outbreaks of animal diseases.

“The global food system is worth $10.5 trillion and we’re building for food what cyber security was for IT. Australia can be the world leader in it.”