Oracle Stock Surges On $500 Billion ‘Stargate’ OpenAI-Trump Deal
by Derek Saul · ForbesTopline
Oracle stock was the most notable winner from the stock market’s first day of trading during President Donald Trump’s second term as Trump unveiled a $500 billion artificial intelligence infrastructure partnership between the cloud computing and data storage giant and other AI heavyweights including OpenAI and Nvidia.
Key Facts
The AI infrastructure deal, dubbed “Stargate,” involves Oracle, OpenAI (the Microsoft-backed parent of the generative AI ChatGPT program), top AI tech designer Nvidia and Tokyo-headquartered conglomerate SoftBank, matching reports earlier Tuesday.
Trump announced the project at a White House press conference flanked by Oracle’s billionaire chairman Larry Ellison, OpenAI’s billionaire CEO Sam Altman and SoftBank’s billionaire CEO Masayoshi Son.
The project includes an immediate $100 billion of investment in U.S. infrastructure for the first year and $500 billion over the next four years, according to OpenAI’s press release on Stargate, which it says will establish “hundreds of thousands” of new American jobs.
Son will be Stargate’s chairman, OpenAI will assume operational responsibility and OpenAI, Oracle and SoftBank all financed the project.
“This will be the most important project of this era,” Altman said at the press conference.
Oracle Stock Roars
Shares of Oracle rose 7% in normal trading hours on reports of the multibillion-dollar initiative, ending the day at their best level since Dec. 13, with gains accelerating following the Trump announcement, gaining a further 3%. The surge made Oracle was by far the biggest percentage gainer of the U.S.’ 42 “mega-cap” companies worth at least $200 billion, headlining broader gains Tuesday, with the S&P 500 rising nearly 1% to its highest close since Dec. 17. Other major AI stocks also rose Tuesday, as shares of semiconductor chip designers Nvidia and SoftBank-backed Arm Holdings rose 2% and 4% in normal trading, respectively, gaining more than 2% apiece in limited afternoon trading.
Larry Ellison Overtakes Mark Zuckerberg As World’s Third Richest
Oracle cofounder and chairman Larry Ellison got $12 billion richer Tuesday as his company’s shares rallied, jumping from $205 billion to $217 billion. Ellison, whose 41% stake in Oracle makes him the company’s largest shareholder, was the biggest billionaire winner Tuesday, more than doubling the $4 billion bump from the next biggest gainer, Amazon founder Jeff Bezos. Ellison’s big Tuesday vaulted him past Meta CEO Mark Zuckerberg to again make Ellison the third-richest person in the world, according to Forbes’ real-time net worth tracker.
Key Background
SoftBank’s billionaire CEO Masayoshi Son appeared with Trump last month to announce his company’s $100 billion investment into U.S. technology ventures during Trump’s presidency. It’s not yet clear how Stargate factors into that commitment or how the three companies will split financing. Oracle is OpenAI’s cloud computing partner, helping power and store the massive data needed to power OpenAI’s large language models. OpenAI CEO Sam Altman, worth $1.2 billion according to our latest estimates, was among a swath of big tech figures including Bezos and Zuckerberg in attendance for Trump’s inauguration Monday, though Ellison was not spotted at the event. A major donor to GOP causes during the 2022 midterms, Ellison did not publicly support a candidate for the 2024 presidential election, though his friend Elon Musk, the richest person in the world, was Trump’s most prolific donor.
Tangent
Oracle hosts the U.S. data of the popular social media app TikTok, becoming a player in the dramatic ban of the app, which went into effect this weekend before Trump signed an extending by 90 days the ban unless TikTok sells its U.S. operations to an American buyer. “Oracle could play a key role in any deal given their key technology partnership with TikTok,” predicted Wedbush analyst Dan Ives in a Sunday note to clients. Shares of Oracle fell 5% after the Supreme Court indicated it would uphold the TikTok ban Jan. 10.