Nvidia Jumps as Trump Announces Massive AI Infrastructure Project
Nvidia (NVDA) shares soared over 4% on Wednesday, continuing gains from the previous day after former President Trump unveiled a $500 billion AI infrastructure initiative.
Stargate Partnership
The project, dubbed Stargate, is a joint venture between SoftBank, OpenAI, Oracle, and MGX. OpenAI has named Nvidia, Microsoft, and Arm as key technology partners for the project, which aims to establish data centers in the US to support artificial intelligence.
Market Impact
Nvidia's surge pushed its market cap to $3.58 trillion, surpassing Apple's $3.35 trillion. Microsoft gained 3% early Wednesday, while Arm surged over 15%. Oracle and SoftBank rose 5.5% and 11%, respectively.
Trump's Vision
"Stargate will build the infrastructure to power the next generation of AI advancements, including massive data centers," said Trump. "These facilities will employ countless individuals."
Biden's Orders
The announcement follows a series of executive orders from the Biden administration restricting AI chip exports to China and accelerating data center construction in the US.
Musk's Skepticism
Elon Musk criticized OpenAI's involvement in Stargate on social media, questioning its financial stability. OpenAI reportedly lost $5 billion in 2024 while generating only $3.7 billion in revenue.
Broader Market Impact
Tech stocks rallied on the news, with Dell and Super Micro Computer gaining 7% and 6%, respectively. Nasdaq futures climbed 1.4%, outperforming S&P Futures (0.6%).
Nvidia's Recent Performance
Nvidia's surge has lifted its shares over 11% from last week. The stock had declined earlier in January after reports of order cancellations from major customers due to technical issues. However, the AI infrastructure project and Biden administration's focus on AI have boosted investor sentiment.