On Tuesday, former President Donald Trump announced a $500 billion artificial infrastructure (AI) infrastructure initiative, spearheading a new company called Stargate. Initial funding for the project will come from SoftBank (SFTBY), OpenAI, Oracle ORCL, and UAE-based MGX. The broader tech sector rallied on news of the massive AI investment, with investors optimistic about the transformative potential of the Stargate project.
Stargate identified NVIDIA NVDA, Microsoft MSFT, and British chip designer Arm (ARM) as "key initial technology partners" to build U.S.-based data centers to power artificial intelligence advancements. OpenAI revealed that $100 billion would be deployed immediately, with up to $500 billion invested over the next four years.
Tech Stocks Surge Amid AI Optimism
NVIDIA's stock jumped more than 4% on Wednesday, boosting its market cap to $3.6 trillion and reclaiming its position as the world's largest company, ahead of Apple AAPL. Shares of Microsoft rose over 4%. Shares of Arm surged nearly 16%. The Oracle stock increased by almost 7%. SoftBank shares jumped nearly 11%. Dell DELL & Super Micro Computer SMCI shares gained around 4% each, reflecting optimism in AI-related server demand.
Broader Strategic Implications
Wedbush analyst Dan Ives noted that the Stargate initiative marks a pivotal moment in U.S.-China competition over AI dominance. "This is a high-stakes game, and Trump is leveraging AI investments to strengthen U.S. technological leadership," Ives wrote in a note to investors, as quoted on Yahoo Finance. The announcement followed recent Biden administration’s efforts to restrict AI chip exports to China and accelerate domestic data center construction.
AI ETFs in Focus
Hence, investors can keep a close tab on exchange-traded funds (ETFs) like Global X Robotics & Artificial Intelligence ETF BOTZ, Global X Artificial Intelligence & Technology ETF AIQ, ROBO Global Robotics & Automation Index ETF ROBO, ARK Autonomous Technology & Robotics ETF ARKQ and First Trust Nasdaq Artificial Intelligence & Robotics ETF ROBT.
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