US billionaire Stephen Schwarzman has pledged a donation of £150 million to fund humanities research and to tackle ”looming social issues” linked to artificial intelligence.

He is the founder and chief executive of Blackstone financial group and has a personal wealth of $12 billion.

Schwarzman previously served as chair of President Trump’s strategic and policy forum before dissolution barely six months after its inception. He describes himself as having a “good relationship” with Trump, saying that he has got on well with the last three presidents in office.

The gift will be used to create the Schwarzman Centre for the Humanities. The aim of this is to bring together disciplines including English, philosophy, music and history in a single hub with performing spaces and a library, which will collaborate with a new Institute for Ethics in AI.

Schwarzman was approached by Vice-Chancellor Louise Richardson about the project 18 months ago on the site of the former Radcliffe Infirmary. She is reported to have expressed surprise when the American businessman proposed more ambitious plans than those initially discussed, creating what she referred to as a “unique humanities hub.”

Richardson said: “It’s really important to me that this gift is a real endorsement and a vote of confidence in the humanities. Stem [science, technology, engineering and maths] has been getting all the attention lately – there’s nothing wrong with that, but it’s great to be reminded how critical the humanities are too.”

She defended the amount Schwarzman has pledged, saying: “We operate in a global marketplace. While in UK terms we’re quite a wealthy institution, when you compare us to the US – Harvard’s endowment of $40bn (£32bn), Yale, Stanford, Princeton and so on – their endowments are many times the size of ours and these are the people we are competing with for staff, for students, for research funding, so we really have to up our game in philanthropy for us to compete successfully.”

Oxford’s existing central endowment currently stands at around £3 billion.

Schwarzman has made large donations before, including $100 million to the New York Public Library, and larger sums to found scholarship scheme at China’s Tsinghua University modelled on the Rhodes scholarship. He has also donated $350 million to AI research at the Massachusetts Institute of Technology (MIT).

Schwarzman explained his interest in the problems surrouding AI technology: “I could see as a result of my trips to China, where I would be meeting all these people starting AI companies, that AI is an explosive force that is going to change the world we live in in the next 10 to 15 years in a very profound way, some for good and some not so good.

“So there was a real need to control the introduction of those technologies to the benefit of society, and what I realised is that Oxford had certain unique characteristics through its work on the humanities and philosophy that would complement what the ‘hard’ scientists were doing around the world.”

Schwarzman attended Yale alongside George W. Bush, both of whom were part of the elite Skull and Bones society. Michael Gross, author of a book about the building the tycoon lives in, describes him as “the epitome of American capitalism.”