Nvidia stock jumped more than 4% Wednesday, leading a surge in tech and chip stocks following the announcement of a massive, $500 billion AI infrastructure project by Donald Trump. The project will create a company called Stargate, initially funded by SoftBank, OpenAI, Oracle, and UAE-based MGX. Stargate has named Nvidia, along with Microsoft and British chip designer Arm, as key initial technology partners for the project, which aims to build US data centers required to power artificial intelligence.
OpenAI stated that Stargate would “begin deploying $100 billion immediately” with plans to invest up to $500 billion over the next four years. Nvidia’s gain pushed its market cap to $3.6 trillion, reinstating it as the world’s largest company, ahead of Apple. Microsoft shares rose over 4%, Arm surged nearly 16%, Oracle was up almost 7%, and SoftBank jumped nearly 11%.
Nvidia’s stock surge after AI announcement
Stargate will be building the physical and virtual infrastructure to power the next generation of advancements in AI, including the construction of colossal data centers,” Trump said Tuesday. “These buildings are going to employ a lot of people.” The effort is meant to maintain the US lead in developing artificial intelligence, especially rivaling China.
The announcement follows recent measures aimed at restricting the flow of AI chips to China and accelerating the construction of data centers in the US. Wedbush analyst Dan Ives noted that the project is “part of a broader game of high stakes poker with China.”
Tech stocks across the board rallied on the news of the major AI investment. Dell and Super Micro Computer, which make servers using Nvidia chips, rose around 4%.
Nvidia’s gain puts shares up nearly 12% from last week.