Nvidia Leads Tech Stock Surge Amid Trump's $500 Billion AI Infrastructure Project

Nvidia (NVDA) shares soared over 4% on Wednesday, bolstering the tech sector and propelling other chip stocks higher following President Trump's announcement of a substantial $500 billion AI infrastructure project.

The initiative, dubbed Stargate, will initially receive funding from SoftBank (SFTBY), OpenAI, Oracle (ORCL), and UAE-based MGX. Stargate identified Nvidia, Microsoft (MSFT), and Arm (ARM) as "key initial technology partners" for the project, which seeks to establish data centers in the US to power artificial intelligence.

OpenAI announced that Stargate would "begin deploying $100 billion immediately" and invest up to $500 billion over the next four years. Nvidia's gain on Wednesday pushed its market capitalization to $3.6 trillion, reclaiming the title of the world's largest company from Apple (AAPL).

Meanwhile, Microsoft shares gained almost 4% early Wednesday, while Arm surged by more than 14%. Oracle stock climbed 7%, and SoftBank rose by over 10%.

"Stargate will build the physical and virtual infrastructure to fuel the next generation of AI advancements, including the construction of colossal data centers," Trump stated in a briefing on Tuesday. "These structures will employ a substantial number of individuals."

Trump emphasized that the endeavor aimed to maintain the US's lead in AI development ahead of China.

The announcement follows a series of executive orders from the Biden administration on AI last week, designed to restrict the flow of AI chips to China and expedite the construction of data centers in the US.

"This occurs at a crucial juncture as we anticipate Trump to aggressively pursue additional AI investments in the US," said Wedbush analyst Dan Ives in a note to investors late Tuesday. Ives highlighted that the project was "all part of a larger game of high stakes poker with China."

After the announcement, Elon Musk criticized OpenAI on his social media platform X. Responding to an OpenAI post about Stargate, he claimed, "They don't actually have the money." OpenAI estimated a $5 billion loss in 2024, with revenue of only $3.7 billion.

Tech stocks rallied across the board in response to the news of the significant AI investment. Dell (DELL) and Super Micro Computer (SMCI), which produce servers using Nvidia chips, gained around 4%.