Good morning. It’s an event-filled week on both sides of the country, with the UN General Assembly causing traffic chaos in parts of Manhattan, and earthquakes and actual hot weather leaving San Francisco residents dazed and confused.
Meanwhile, in the beautiful city of Abilene, Texas (population: 125,182), the forecast calls for data centers, tech execs, politicians, and journalists. More on that, and the latest tech news below. —Alexei Oreskovic
Want to send thoughts or suggestions to Fortune Tech? Drop a line here.
Live from Texas: OpenAI's Stargate
Remember Stargate, the half-trillion AI datacenter project that OpenAI touted earlier this year alongside President Trump?
In the months since the announcement, there has been speculation that the project might have stalled. But on Tuesday, OpenAI, along with partners Oracle and SoftBank, made it clear that the project is anything but dead.
The companies announced plans and locations for building five massive data centers in the U.S. over the next several years. They also invited reporters to Abilene, Texas, to tour its first data center complex, which is only half-built but already in operation.
“We cannot fall behind in the need to put the infrastructure together to make this revolution happen,” OpenAI’s Altman said at the event, alongside Oracle's newly-appointed co-CEO Clay Magouyrk, Texas Senator Ted Cruz, the mayor of Abilene, and even a Texas county judge.
Fortune's Sharon Goldman was on location for the spectacle. Her fascinating report, which you can read here, is a testament to the times we live in. —AO
AI versus recession
AI capex is now so massive it is keeping the U.S. out of recession, Deutsche Bank said in a research note on Tuesday.
“AI machines—in quite a literal sense—appear to be saving the U.S. economy right now,” George Saravelos of Deutsche Bank wrote in the note. “In the absence of tech-related spending, the U.S. would be close to, or in, recession this year.”
The problem, the note explained, "is that in order for the tech cycle to continue contributing to GDP growth, capital investment needs to remain parabolic. This is highly unlikely.”
Separately, Bain & Co. estimated that there will be an $800 billion shortfall in the revenues needed to fund the demand for AI computing power.
Even as the pair of research notes warned that the current boom in AI may not be sustainable, capital continues to pour into AI. Hours after the notes were published, OpenAI, Oracle, and SoftBank announced the new Stargate data centers. —Jim Edwards
Larry Ellison and Son, the new media power duo
Rupert Murdoch and his son Lachlan have a new rival for the top spot of father-and-son media mogul dynasties. As the New York Times reports, Oracle co-founder Larry Ellison and his son, David, are poised to own a significant collection of media assets between them.
David's Skydance Media acquired Paramount, the storied film studio that also owns CBS and MTV, for $8 billion this summer. And according to various media reports, he now has his sights on Warner, which owns CNN, and is in discussions to acquire online publication The Free Press.
Meanwhile, Oracle appears set to be among the new owners of the U.S. version of TikTok if a deal to spin it out from Chinese parent company ByteDance goes through. Larry Ellison, who is 81, owns more than 40% of Oracle's shares, according to The Times.
One thing both the Ellison and the Murdoch duos have in common: They're close to President Donald Trump. —AO
More tech
—AI-generated ‘workslop’ may be causing productivity problems at companies. It masquerades as real work but lacks substance and sucks up everyone's time fixing it.
—One big winner of Trump’s H1-B crackdown could be Canada. It's closer than Europe or India.
—Crypto venture firm Archetype raises $100 million for third fund. Objective: tap into ‘post-AOL, pre-Uber’ vibe.
—Cathie Wood says the AI race has already shrunk to the ‘Big 4’ key players. It might soon drop to 2.
—Zerohash gets $1 billion valuation. The crypto and stablecoin startup raised $104 million.
