(Jan 22): Shares of SoftBank Group Corp jumped 12% on Wednesday, after the company announced it is teaming up with OpenAI, Oracle Corp and Abu Dhabi-backed MGX on a US$500 billion (RM2.22 trillion) project to build data centres and infrastructure in the US for the ChatGPT creator.
The stock rose in its biggest intraday surge since August after SoftBank founder Masayoshi Son said the four would invest in a joint venture that would spend US$100 billion “immediately” on infrastructure and target spending at least US$500 billion over the next four years to build more computing power. Companies including Microsoft Corp and chipmaker Nvidia Corp will supply technology, SoftBank said in a statement after US President Donald Trump announced the artificial intelligence (AI) push.
Oracle rallied 4.6%, while SoftBank’s chip-designer unit Arm Holdings plc gained 4.8% in New York trading.
While funding considerations for the Stargate project remains key, the Japanese tech conglomerate’s participation alongside AI heavyweights “shows how valuable the quality and combination of SoftBank’s assets and tech investment management capabilities are seen to be” at this point in time, Macquarie analyst Paul Golding said in a note to investors.
The announcement comes on the heels of Son’s pledge to invest US$100 billion in the US over the next four years during a press event at Trump’s Mar-a-Lago estate in Florida. That deal was expected to include investments in AI, data centres, semiconductors and energy. It was not immediately clear if the two announcements are for the same or different projects.
As the scale of projects touted by Son snowballs to hundreds billions of dollars, many question how the huge sums of money will be bankrolled. SoftBank has stakes in hundreds of start-ups as well as a 90% stake in Arm that it can sell to finance any big bet.
Since late 2022, after incurring heavy losses at the Vision Fund, Son has spent his hours reshaping SoftBank’s strategy with a focus on AI, chips and energy.
The revelation is “good news for SoftBank”, Astris Advisory analyst Kirk Boodry said. “We expect markets to start to build AI upside into their valuations now that we know where SoftBank intends to go.”
Uploaded by Tham Yek Lee