Capital and the AI Cycle

On 21 January 2025 President Trump hosted an announcement at the White House. OpenAI, SoftBank, Oracle and MGX, an Abu Dhabi investment company, said they would form a joint venture called Stargate to invest "up to $500 billion" in US AI infrastructure over four years, with $100 billion to be deployed "immediately" (companies). SoftBank would be responsible for finance, with Masayoshi Son as chair, and OpenAI for operations. The first campus, at Abilene in Texas, was being developed by Crusoe on land and power it had secured, and leased to Oracle. The same day Microsoft's exclusive right to supply OpenAI's computing was replaced by a right of first refusal, freeing OpenAI to buy elsewhere.

The headline proved to be a ceiling rather than a budget. By September 2025 the partners had announced about 7 gigawatts of sites and more than $400 billion of planned investment, but most of the capacity was contracted bilaterally rather than through the joint venture (reported). Abilene had about 0.3 GW operating in April 2026 (Epoch AI estimate). In March 2026 Oracle and OpenAI were reported to have dropped a planned expansion of the campus, which Oracle disputed, and Microsoft leased ~900 MW of the expansion instead (reported). Meanwhile OpenAI signed for capacity with almost every supplier in the industry, and by November 2025 Sam Altman said it had about $1.4 trillion of compute commitments over roughly eight years, about 30 GW, against 2025 revenue of ~$13 billion (reported). In February 2026 the target was reported to have been reset to about $600 billion of compute spending by 2030.

This chapter is about the capital cycle, the first of the two forces that sit around the intelligence equation like weather: where the money for AI came from, why so much of it went round in circles, and how to tell when the weather is changing.