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Investing.com - US-listed shares in Oracle (NYSE:ORCL) spiked in premarket US trading on Wednesday, extending a climb in the prior session sparked by President Donald Trump's announcement that the computer software group would participate in an up to $500 billion private-sector investment into artificial intelligence infrastructure.
Trump said on Tuesday a planned joint venture between Oracle, ChatGPT-maker OpenAI and Japanese tech investment titan SoftBank (TYO:9984) will seek to construct more data centers and create over 100,000 jobs in the US.
Called "Stargate", the move includes the committment of $100 billion for immediate deployment from these companies, with the rest of the funding due to come in the next four years.
Speaking at a press conference with Trump, OpenAI head Sam Altman and SoftBank boss Masayoshi Son, Oracle Chairman Larry Ellison said the first of the project's data centers is already under construction in Texas, adding that twenty are expected to be built. The construction would provide enough power to underpin AI that can pour through electronic health records and aid doctors in patient care, according to Ellison.
"[W]e [...] believe [...] that this is a clear narrative affirmation for Oracle as it supports the AI winner narrative and accelerating growth at scale," analysts at Wolfe Research said in a note to clients.
Demand for data centers has soared along with a spike in enthusiasm around AI, with the infrastructure seen as necessary in fueling the development of the nascent technology.
Initial reports of the joint venture pushed Oracle's stock price higher by 7.2% on Tuesday, as well as shares in other AI-exposed firm like Nvidia (NASDAQ:NVDA), Dell (NYSE:DELL), and Arm Holdings (NASDAQ:ARM).
"This deal has material implications for the 'AI trade', securing OpenAI enormous capacity in its race against Google (NASDAQ:GOOGL), Meta (NASDAQ:META), xAI and Anthropic, securing a place for Oracle as a key [graphics processing unit] infrastructure provider and ending an exclusive compute arrangement with Microsoft (NASDAQ:MSFT) that has enabled OpenAI to scale to where it is today," analysts at UBS said in a note to clients.
(Ambar Warrick contributed reporting.)