Semiconductor ETFs surge after President Trump and multiple tech industry titans announced Project Stargate, a $500 billion investment in U.S. AI data centers
this ishares Semiconductor ETF (SOXX) and Vaneck Semiconductor ETF (SMH)- Own up to 1.4% more shares in companies that will benefit from the investment.
"Project Stargate is a new company that intends to invest $500 billion over the next four years to build new AI infrastructure for OpenAI in the United States," Openai wrote in an accompanying press release.
The news was first announced at the White House, where President Trump was joined by Openai CEO Sam Altman, son of Softbank boss Masayoshi and Oracle founder Larry Ellison.
The three companies, along with UAE-based technology and AI investment firm MGX, will be initial equity backers of the project; while Arm Holdings Plc, Microsoft Corp., Nvidia Corp., Oracle Corp. and OpenAI will be initial technology partners.
Shares of these companies soared Wednesday, boosting ETFs that own them, such as the aforementioned SOXX and SMH, as well as broad tech ETFs like the Invesco QQQ Trust (QQQ) and Technology Select Sector SPDR Fund (XLK)an increase of 1.3% and 2.3% respectively.
NVIDIA, in particular, is seen as a major beneficiary of any incremental investments in AI infrastructure. The company's chips account for most of the cost of building an AI data center today. Its shares were up 4.4% in afternoon trading, while leveraging Graniteshares 2x Long NVDA Daily ETF (NVDL) rose 8.8%.
While investors were busy bidding on AI stocks Wednesday on the back of the Stargate announcement, not everyone was convinced the venture would amount to anything significant.
Venture capitalist Gavin Baker said on X that companies involved in the venture are unlikely to come up with nearly $500 billion in investment.
He said: "Stargate is a great name, but $500B is a ridiculous number and no one should take it seriously unless SoftBank is selling all their dads and arms."
Elon Musk, founder and CEO of Tesla, SpaceX and Xai, echoed this sentiment on X. "They literally have no money," he said, while adding that "soft bull banks have less than $10b in margin," his source said.
Openai's Altman fired back, saying: "As you know, that's wrong. Want to come visit the first site that's already underway? It's great for the country. I realize that what's great for the country isn't always What's best for your company, but in your new position, I expect you to mostly put first and foremost," he said.
Musk had not responded at the time of writing.
Musk, whose XAI company competes with Openai, has feuded with Altman for years and is currently pursuing a lawsuit against the company he co-founded but later left.