Trump's Positive Attitude Towards AI After Taking Office

Author: Li Xiaoyin

Trump officially announced a major AI project, planning to invest $500 billion, causing Oracle, Nvidia, and Arm stocks to rise across the board.

On the evening of the 21st, Eastern Time, Trump announced the "Stargate" project. Following the news, U.S. tech stocks collectively surged overnight, with significant increases in the stock prices of companies like Oracle and Nvidia.

By the close of trading that day, Oracle was up 7%, Nvidia up 2%, and Arm up 4%, outperforming major tech ETFs (XLK) and the S&P 500 index.

Investment Exceeding $100 Billion, Major Mergers "Unleashed"

As previously mentioned by Wall Street News, the "Stargate" project plans to establish a joint venture named Stargate by OpenAI, SoftBank, and Oracle to jointly invest heavily in AI infrastructure, with an expected initial funding of $100 billion, increasing to $500 billion over four years.

According to media reports, on the eve of taking office, Trump publicly stated that he would pave the way for "wealthy individuals" to invest in "AI factories" to provide power for data centers. Tech giants' executives, including Meta CEO Mark Zuckerberg and Amazon founder Jeff Bezos, attended Trump's presidential inauguration on Monday. One of Trump's first actions after taking office was to revoke the AI executive order from the Biden administration.

This indicates that, unlike Biden, Trump has taken a very positive attitude towards AI after taking office, not only allowing companies to "go all out" but also significantly increasing investments.

OpenAI's CFO Sarah Friar stated that the Trump administration has shown a "real willingness" in technology and artificial intelligence and is "very advanced economically."

Some analysts pointed out that the launch of the "Stargate" project may signify that the Trump administration is beginning to seek cooperation with tech companies. Google DeepMind CEO Demis Hassabis stated in an interview on Tuesday:

"It is clear that the new government will encourage technology and tech development."

"The government is getting advice from people who truly understand the cutting-edge dynamics."

What Does This Mean for the Three Companies?

Other analyses suggest that as the leading party in this project, OpenAI can acquire a large amount of data center computing resources through collaboration, Oracle is expected to become a key infrastructure provider and gain more orders, while SoftBank will leverage its "financial power" to secure a "ticket" for this major project.

Oracle founder Larry Ellison mentioned during a speech at the White House that Oracle had been collaborating with OpenAI and SoftBank even before the official announcement of the "Stargate" project. Mizuho analyst Siti Panigrahi stated in a report to clients:

"This is an important opportunity for Oracle, as it may become the key infrastructure provider for this large-scale investment."

SoftBank CEO Masayoshi Son stated during his speech at the White House that he had promised to invest $100 billion in the U.S. last month, and Trump suggested he double that investment. Now, this figure has increased to $500 billion.

OpenAI founder and CEO Sam Altman also stated:

"I am very pleased that we can do this in the U.S. I believe this will be the most important project of this era."

Guangfa: "Stargate" Becomes a U.S. "National Project," Highlighting the "Extreme Importance" of AI

Guangfa Securities believes that Stargate becoming a U.S. "national project" reflects the extreme importance of AI development. The $500 billion capital expenditure over four years averages to $125 billion per year (with $100 billion in 2025). In comparison, the combined capital expenditure of Microsoft, Google, Meta, and Amazon for 2024 (including non-AI) is only about $220 billion.

Guangfa Securities believes that while this project is a significant "achievement" in the tech field since Trump took office, the probability of execution is relatively high. It is expected that Stargate will drive the expansion of markets for light, copper, data center interconnect (DCI), local Texas power resources/storage systems/small reactors, liquid cooling systems, server power supplies, and more.

In terms of the merged corporate structure, Guangfa expects that SoftBank and OpenAI will be the main partners of Stargate, with SoftBank responsible for finance and OpenAI responsible for operations; Arm, Weirun, Nvidia, Oracle, and OpenAI will be key initial technology partners.

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