8:31
This is where OpenAI is building their new Stargate data center. Well, actually, it's not exactly here, but more like here. Argentina's Patagonia. Nobody actually knows where the data center is going to be built. And that is a little suspicious. Sam Alman came up with this kind of like teleprompter red announcement. Today, we're proud to announce plans to launch Stargate Argentina. almost like satisfying some PR stunt contract requirement and Argentinians, they're not happy about it.
This announcement took him by surprise two weeks ahead of a really important election and they don't understand how a country that has to deal with power outages in the summer is suddenly hosting this huge data center. Even as I shoot this, this region where I'm standing is in a state of emergency because of an ongoing drought. Can Argentina become this AI hub that Stargate is promising? And what does that mean for the resources in the area? I flew down to the Argentinian Patagonia last week and I discovered a trail of manipulation and phantom companies and a bunch of unanswered questions.
Argentina has faced some crazy inflation swings through its history. The most recent of those swings was in 2023. Man, that money exchange was that was a crazy experience. Okay, so these eggs benedict were 13,500 pesos, which is about 9 bucks in today's money. Those are pretty affordable eggs benedicts. But at the end of 2023, this would have cost about 3,500 pesos. So the price has gone up almost four times since then. Between November 2023 and February 2024, prices almost doubled for everything in Argentina. But at the height of this inflation rise, a new and unorthodox president promised to cut it. And despite lots of controversy that I'm not going to get into, he did. So
another thing Mille did was establish this program called Bridgy or RITI to bring foreign capital into the country. In a nutshell, if a foreign company invests over $200 million in Argentina, gets a bunch of tax write-offs, bureaucracy reduced, overall it makes it a lot easier to run their business. So apparently there are like five different sites being considered for this data center. Nobody knows exactly where it's going to be built. The most likely seems to be around this city called Noken. So we found the next flight out of Bonazitis and it's also crazy dry like a desert.
All the way here it's been like this flat dry land. Noken is a small city about a 2-hour flight south of the capital. In the natives language, it means water that has strength. And for decades, it's been this agricultural center thanks to its surrounding rivers. But today, it's in a drought. I don't get it. I don't get why OpenAI would want to build a data center out here. And in 2010, this small farming city would change forever because of that. Cuz right underneath us is the fourth largest shale oil deposit in the world. It's called Bakam Muerta or debt cap. So most of Argentina's electricity comes from fossil fuels.
Hydro is next in the chart, but capacity dwindle last year in parts due to this drought. Now, it's thanks to this oil field, oil pocket discovery that Argentina went from being an energy importer into an energy exporter. Now, does that mean that this new data center is going to be powered by fossil fuels? Hold that thought. There's a lot of that we don't know. Nobody knows. Uh the only thing that we do know is that Stargate/ OpenAI signed this letter of intent uh with the idea to build this $25 billion data center somewhere in Argentina. So I guess the next question is well how does a $25 billion data center look like? It's huge and it's very busy. So I'm going to use the data center that Stargate is building in Texas uh as a
bit of a reference. Now, that data center is set to cost $15 billion versus the $25 billion commitment that OpenAI made here. Now, that Texas data center is much larger, $1,200 megawatt versus the 500 megawatt that might be built here, but we can use that to estimate how big this one could be. And we know the Texas data center is going to run about 400,000 GPUs. And if you just do a proportion of that for Argentina, that'd be about 160,000 GPUs for this 500 megawatt data center. Now, beyond the initial construction workers in Texas, that site is supposed to create 400 jobs. That mean like 160 jobs here in Argentina. Who's getting all the money then? Is it Nvidia for the chips or is it
the power company? I mean, yeah, electricity is part of the answer. Today, we're proud to announce plans to launch Stargate Argentina, an exciting new infrastructure project in partnership with one of the country's leading energy companies, Sir Energy. Yeah. So, we've spent a few hours trying to find any sewer energy office location in Monositis. We took this 45minut Uber ride, trying to find this address, which is the only thing remotely close to it. And that's that's it. like that's that's your $25 billion company. So, according to this local news outlet, Sur Energy did in fact not exist before all this fuzz. It's going to act as a broker and it got created to do that to just broker this deal between OpenAI and a local large energy company.
By the way, these business stories of weird unconventional locations are really out of the box business ideas. That's what the Hustle newsletter is all about. And they supported our channel and they made this video possible. The Hustle sends you a daily insight of fantastic business opportunities that most founders tend to overlook. So, they're not about breaking the story first. It's much more about doing a deep dive of actionable items that can be useful to entrepreneurs. Subscribing to The Hustle is completely free. You get it daily on your email. You get no spam. You can use this QR code here to subscribe. I'm going to link in the description anyway if that's what you're into. And again, thanks to
the Hustle for supporting our channel and making today's video possible. I also want to take a moment to recognize Matt Traviso, who led our partnership discussions before he tragically passed away in a recent mountaineering accident. Matt Traviso was one of the co-founders of a US big data company called Grand Data. He is credited with being the bridge between the Argentinian government and Silicon Valley, which eventually connected Malay to the Trump administration. He tragically passed away in a hiking accident in Mount Shasta in California. So, I've been digging through some more news um and I found this other guy aside from Mat Travis. Uh his name is Emiliano Kimman. Emiliano runs this large tech
company based out of the US. He's he's one of the founders. It's called Satalogic and it sells contracts, has usual contracts with the US government. Now, Emiliano did an interview with a local newspaper. And in this interview, he talks about two large energy companies that apparently are part of the deal here in Argentina. One is called Janea and the other one is called Central Puerto. Now, Central Puerto has a large dam just south of here in Noken. So, I think we're gonna go tomorrow and try to find it.
Man, this is far. I've we didn't set out we uh we didn't set out to drive this far. It's 200 kilometers from Nken to this dam. So that's uh miles that's going to be like 120 mi, I think. Wow. And it's all it's like it's not a desert. It's like flat bushes dry. So maybe, just maybe, that's the dam that would power this entire thing. That's a 1,400 megawatt 1.4 gawatt power plant. That would be enough to power this entire data center, but we are in the middle of nowhere. It's also really dry out here, and data centers need a lot of water. In just one day, the average data center could use 300,000 gallons of water to cool itself.
Water is a big problem with data centers. A 500 megawatt data center like the one that's supposed to be built out here is going to get about 10,000 cubic meters of water every day. The thing with water is that GPUs get really hot and you have to put a lot of GPUs in the same place in the same building in the same rack, which means that the only way to keep them acceptably cool is to just run this water cooling system through all the servers and then the water gets evaporated so it doesn't disappear. It's not completely wasted cuz it might rain down eventually somewhere. But it does put a big strain in communities especially if their water is already scars in the first place.
Just for you to get a reference, a 100word prompt into Chad GPT is going to evaporate about an entire bottle of water. Based on that standard, we're looking at the water equivalent of about 20,000 homes or it's 13 times the entire water supply of the town of Pagula, which stands just next to the power station. So, construction is set to begin next year. Suit Energy is going to be in charge of the construction. Well, not really them, but whatever contractor company they hire to build out the data center. And we do know that one of these utility companies is going to be powering the data center. But what we don't know is if OpenAI is going to be the one that owns the servers or the chips or if there's going to be a third party entity and OpenAI just
made a commitment to buy out all this processing power. I don't think anybody knows the answer to that. This milestone is about more than just infrastructure. It's about putting AI into the hands of people across Argentina. Now, we do know that Stargate is a joint venture by OpenAI, Oracle, and SoftBank. We know that they intend to spend about 500 billion, but they've only really raised about 100 billion so far. But this was originally announced as a US project with a lot of support from the government. G what we want to do is we want to keep it in this country. China is a competitor and others are competitors.
Now, Malay's popularity had been on the decline leading up to this midterm election for Congress seats. Protesters held up handwritten signs. When some began throwing bottles and rocks at him, the scene turned chaotic. Argentina bailout. What do you think $20 billion buys you, the US taxpayer? It could buy you an election 5,000 m away here in Argentina. We think he's going to win. He should win. And if he doesn't win, we're not going to waste our time because you have somebody whose philosophy has no chance of making Argentina great again.
I haven't seen anybody point out this coincidence, but this OpenAI announcement came just in time. Just in time for his party to win this election and then consolidate power once again in Congress. Now, I'm still hopeful for what this could mean for Argentina. One of the reasons this city is even considered is because Noken has every energy source imaginable from fossil to hydro to wind and even a nuclear power plant. And the companies that Energy is partnering with, they both have this focus on clean energy even though they still run some fossil fuel plants. So there's a world where these plants are actually powered by clean energy. And also the Stargate
data center that got built in Texas uh uses a new sort of water cooling system that doesn't evaporate the water to cool down the GPUs, but actually kind of keeps it in a loop and it doesn't require new water to be pumped into the system. We basically fill it one time and then we're done. And that's something we can easily coordinate with the city in terms of, you know, getting a million gallons of water one time. It's a far different ask than, you know, asking for a million gallons an hour or some other crazy request. That's the system that's supposed to be used here, but I guess it's just a matter of sewer energy holding on to their word on that. Now, under the tax benefit RAIG program that the president implemented, there's
another potential investment coming for Argentina, and that's in the lithium deposit in the very north of the country. I actually headed there last week to do a report on a secret that's buried under the salt. So, you should check that video out. Thanks a lot for watching. Thanks, Argentina, for hosting us.
