President Donald Trump is reportedly set to announce billions in private investment for AI infrastructure from a joint venture of OpenAI, SoftBank and Oracle (ORCL). Oracle stock jumped on the news.
Through a joint venture called Stargate, the three companies are committing to $100 billion in initial investment and plan to invest up to $500 billion over the next four years, as reported by CBS News and the Wall Street Journal. OpenAI Chief Executive Sam Altman, Oracle Chairman Larry Ellison and SoftBank Chief Executive Masayoshi Son are expected to make an announcement at the White House this afternoon, according to CBS News.
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The collaboration will start with a data center project in Texas, per reports.
On the stock market today, Oracle stock is up 7% at 172.27.
Oracle Stock Coming Off Best Year Since 1999
Barclays analyst Raimo Lenschow said in a client note that the news highlights Oracle’s AI positioning.
“We see this as clear positive for Oracle, highlighting the company’s strong position as an AI beneficiary that supports Oracle’s multiyear growth story,” Lenschow wrote. “In addition, we see the news as a favorable data point for software more broadly, as the news seems to demonstrate that the new administration will encourage AI investments.”
Oracle stock rallied by roughly 60% in 2024, its best year since 1999. Shares of the database software company, founded in 1977, have soared as Oracle’s cloud infrastructure business is attracting AI startups that need cloud computing power to train their algorithms.
Bur Oracle stock has pulled back in recent weeks from a high of 198.31 reached on Dec. 9. Oracle’s fiscal Q2 earnings report that same day missed expectations for earnings and sales. The stock fell 7% and traded mostly lower to close the year. But the stock retook its 21-day moving average with Tuesday’s move and has posted gains for five consecutive trading days.
Oracle told investors last year that it expects its capital expenditures to double from the $7 billion the company spent in its May-ending fiscal 2024. It is not yet clear how the joint-venture spending could factor into those investments. Oracle did not immediately return a request for comment on the CBS and Wall Street Journal reports.
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