What does "Stargate" mean for the AI industry?

More and more details about the "Stargate" project are emerging, which could potentially change the future landscape of AI competition.

On the evening of the 21st, Eastern Time, Trump announced a "Stargate" project involving hundreds of billions of dollars. The plan is a joint venture between OpenAI, SoftBank, and Oracle to jointly invest heavily in AI infrastructure. The plan aims to invest $500 billion over the next four years, with $100 billion to be invested immediately.

The project has sparked market interest in the potential collaboration between OpenAI and Oracle, but JP Morgan analyst Jack Atherton believes that the project deepens Microsoft's partnership with OpenAI and extends it to 2030, with Microsoft continuing to enjoy access to OpenAI's intellectual property, revenue sharing, and exclusivity on the API, along with a "right of first refusal" for new computing capabilities. Additionally, the plan will promote deep collaboration between OpenAI, NVIDIA, and Oracle to build and operate computing systems.

JP Morgan believes that the additional $100 billion in capital expenditure could help alleviate concerns about AI chip capital expenditures in 2026. Given the urgency of the project launch, NVIDIA may benefit in the short term. In the long run, OpenAI and SoftBank's future efforts in custom ASIC chips may have a potential impact on the market share of chip manufacturers like NVIDIA.

Competition and Cooperation under "Stargate"

As the leading party in this project, SoftBank is primarily responsible for funding, while OpenAI is responsible for project operations. Technical partners include Arm, Microsoft, NVIDIA, Oracle, and OpenAI.

JP Morgan analyst Jack Atherton believes that this is more of a "publicity stunt" by Trump rather than a substantive investment plan. The market is concerned about whether a deeper cooperative relationship will be established between OpenAI and Oracle. Jack stated that, for now, Microsoft and OpenAI are closely linked:

"OpenAI needs funding, infrastructure, and distribution channels (which Oracle can currently provide); Microsoft needs AI technology and a core AI customer for its Azure cloud platform. This is a rapidly evolving field, and we need to keep a close eye on it, but the 7% stock price difference between Oracle and Microsoft seems a bit large to me."

JP Morgan pointed out that this is undoubtedly a good outcome for Microsoft, as the partnership with OpenAI has been further deepened in the Stargate project, and their long-term collaboration will extend to 2030. According to the updated agreement, Microsoft will continue to enjoy access to OpenAI's intellectual property, revenue sharing, and exclusivity on the OpenAI API.

It is worth noting that Microsoft has obtained a "right of first refusal" for new computing capabilities in the agreement. At the same time, OpenAI has also committed to significantly expanding its use of the Azure cloud computing platform to support its product development and model training.

JP Morgan stated that given the urgency of the current political situation, they seem to want to launch the project as soon as possible, as the Stargate project could provide a boost to NVIDIA in the short term.

"We believe that OpenAI has been collaborating with Broadcom to develop ASICs, but it will take at least another 12 to 18 months before they can be put into production. The situation with SoftBank is similar, if not more delayed. As far as we know, Oracle has no ASIC projects."

$500 billion, where is the "Stargate" headed?

The $500 billion investment plan for "Stargate" far exceeds market expectations, but the specific timeline and implementation details of the project remain somewhat vague. JP Morgan predicts that by 2025, the capital expenditures of the world's five major cloud computing giants, including Amazon, Microsoft, Google, Meta, and Oracle, will total about $300 billion, with actual figures potentially being higher.

Elon Musk has "doused cold water", believing that the companies participating in "Stargate" cannot actually provide that much funding, with SoftBank being able to directly offer less than $10 billion; Anthropic CEO Dario Amodei also thinks the project is "a bit chaotic," stating, "It is currently unclear how much actual funding is involved and how much has been committed," and it is also unclear how the Trump administration will participate in the project.

According to the latest reports, OpenAI and SoftBank will each invest $19 billion into "Stargate," while Oracle and MGX will contribute $7 billion, with the four founding companies collectively investing $45 billion, and the remaining funds will come from other new investors and debt financing.

For the semiconductor industry, this plan is undoubtedly good news. JP Morgan analyst Joshua Meyers pointed out that $100 billion in new capital expenditures could help alleviate concerns about AI chip capital expenditures in 2026.

He also noted that while the Stargate project is significant, in the short term, these changes may not yet be fully reflected in capital expenditure data.

It is worth noting that in the long run, as companies like OpenAI and SoftBank work on custom ASIC chips, there may be a reduced reliance on NVIDIA in the future