On January 22, Oracle's shares surged by nearly 9% in premarket trading following an announcement by U.S. President Donald Trump about the company's participation in a significant infrastructure investment initiative, alongside OpenAI and SoftBank.
The collaboration, known as Stargate, aims to infuse $500 billion into enhancing U.S. capabilities in AI to maintain a competitive edge against global rivals like China. Immediate deployment of $100 billion is planned, with the remaining investment to be spread out over the next four years. Initial construction of the project's data centers is already underway in Texas.
Nvidia has been selected to provide chips for the venture, resulting in a 2.4% increase in the chip giant's stock. Subsequently, other technology partners experienced gains, including Microsoft up by 1.5% and Arm by 5.4%.
Wedbush analyst Dan Ives commented, "We anticipate an influx of substantial AI investments in the U.S. with more major tech players expected to announce their initiatives in the upcoming weeks."
The energy-intensive nature of AI, essential for its computational power, has spurred demand for specialized data centers and the electricity necessary to power them. Consequently, shares of Vistra, a nuclear power company, rose by 4.2%, reflecting a more than fourfold surge in the past year attributed in part to the increasing demand for clean, sustainable energy by data centers.
Stocks of AI server manufacturers also saw increases, with Dell Technologies up by 3.4% and Super Micro Computer by 3.3%. Additionally, AI data analytics firm Palantir Technologies saw a 2.1% increase in its stock price.
Following reports of the joint venture, Oracle's shares closed 7% higher on Tuesday.