Stocks of global industrial and tech companies rally after Trump's AI investment drive
On Wednesday, global industrial and technology shares including Oracle and Schneider Electric rose after U.S. president Donald Trump announced a massive investment push in artificial intelligence.
Trump announced on Tuesday that the private sector would invest up to $500 billion in AI infrastructure. This announcement sparked interest in stocks which help to build the architecture of the technology.
Oracle, one company involved in this effort, rose more than 9,5% in early U.S. market trading. AI-related firms in the U.S., including chip giant Nvidia, Broadcom, and Arm, gained between 2% to 6.5%.
Microsoft, a partner in the initiative as well, rose by 2%.
Many European stocks have reached record highs.
The French company Schneider Electric, which is a major provider of electrical equipment, data center infrastructure, and other infrastructure, rose 3.4% in Paris to reach a new record.
Prysmian Italian Cables, which bought Encore Wire in the U.S. last year, has gained 3.3%, reaching a new high. Siemens Energy, a German company that provides electric hardware to AI infrastructure, and ABB in the United States, both rose by 6.7% and 3.8% respectively.
Angelo Meda is the head of equity at Banor SIM, Milan. He said that these companies are included in the investment baskets focusing on electrification and data centers, as well as energy transportation infrastructure. These investments benefit from the current trends in AI and electric vehicles.
DOUBTS ABOUT FUNDING
Stargate is a joint initiative between OpenAI (creator of ChatGPT), SoftBank, Oracle, and other equity investors. The initial investment will be $100 billion, and the remainder of the funds are expected to be raised over the next 4 years.
SoftBank and OpenAI are leading the project. ChatGPT said that the Japanese tech investor would be responsible for the finances, while OpenAI would handle the operations.
The plan did not include details about how the money was to be spent, nor did it specify where the firms were going to get the money.
Elon Musk was one of the loudest critics of OpenAI which he founded but left.
Musk stated on X that SoftBank had secured "well below" $10 billion. He added that he "had on good authority" this information.
Could not independently verify Musk’s claims.
Rene Haas CEO of Arm told CNBC Wednesday that the consortium was still working on the financial details for Stargate.
Analysts said that they expected more companies to participate and the majority of funding would likely come from joint venture partners. The initiative may include projects that are already underway at some companies.
Ben Barringer is a technology analyst for Quilter Cheviot. He said that the list of founding partners will likely be expanded.
It is interesting to see that there are datacenters already in construction. We can assume some of these have been built using Microsoft's and Oracle’s capital expenditure. We do not have all the details and will need time to see what happens.
(source: Reuters)
