Nvidia Stock Surges on Trump's AI Infrastructure Announcement

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

The project establishes a company called Stargate, funded by SoftBank (SFTBY), OpenAI, Oracle (ORCL), and MGX. Nvidia, Microsoft (MSFT), and British chipmaker Arm (ARM) are identified as "key initial technology partners" for the initiative, which aims to build US data centers for powering artificial intelligence.

OpenAI stated that Stargate would "begin deploying $100 billion immediately" and allocate up to $500 billion over the next four years. Nvidia's rally on Wednesday lifted its market capitalization to $3.6 trillion, temporarily eclipsing Apple (AAPL) as the world's largest company. Microsoft shares also rose nearly 4%, Arm surged over 14%, Oracle gained 7%, and SoftBank jumped more than 10%.

"Stargate will build the physical and virtual infrastructure for the next generation of AI advancements, including colossal data centers," Trump stated in a briefing. "These large-scale structures will create numerous jobs." According to Trump, the project aims to maintain the US's lead in AI development against China.

The announcement follows a series of executive orders on AI issued by the Biden administration last week, targeting the flow of AI chips to China and expediting data center construction in the US. "This is a crucial step as we anticipate Trump's aggressive pursuit of AI investments in the US," Wedbush analyst Dan Ives commented. Ives emphasized that the project is part of a "high-stakes poker game with China."

Elon Musk criticized OpenAI on his social media platform X after the announcement, questioning their financial capabilities. OpenAI estimated a $5 billion loss in 2024 with revenue of $3.7 billion. Tech stocks across the board rallied on the news of the substantial AI investment, with server manufacturers like Dell (DELL) and Super Micro Computer (SMCI) gaining around 4%.