Early trading hours on Wednesday, January 22, have been big for the stock of the British semiconductor company Arm Holdings (NASDAQ: ARM).
Specifically, ARM shares rocketed immediately upon the ringing of the morning bell and are, at their press time price of $181.05, up 16.64% in the last 24 hours and 25.05% in the green in the last 5 days.
The spectacular rally for the semiconductor company was solidified by an interview Jim Cramer did with Arm Holdings CEO Rene Haas on January 22. The interview served to highlight Arm Holdings’ role in the recently-announced Stargate Project.
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What is The Stargate Project
The Stargate Project is a new company revealed by OpenAI on January 21, intended to invest $500 billion into the further development of artificial intelligence (AI) across several years with an initial investment of $100 billion.
The firm’s initial equity funders include prominent SoftBank (TYO: 9984), Oracle (NYSE: ORCL), MGX, and OpenAI itself, while the list of key technology partners expands to include Arm, Microsoft (NASDAQ: MSFT), and Nvidia (NASDAQ: NVDA).
In the interview with Cramer, Rene Haas was particularly bullish about SoftBank’s involvement and determination and its continued backing of Arm Holdings.
Regarding the new company’s goals, the CEO expressed enthusiasm about AI’s hoped-for ability to significantly reduce testing and development times for critical things such as new medication.
Furthermore, President Donald Trump was also optimistic about the new project and estimated it might generate as many as 100,000 new jobs.
New AI project sparks social media controversy
The Stargate Project quickly became the center of a social media controversy when Elon Musk replied to OpenAI’s initial X post stating that ‘they don’t actually have the money,’ and subsequently adding that he has ‘on good authority’ that SoftBank, by that point, secured less than $10 billion.
Though Sam Altman did not challenge Musk’s claim in his reply to the tweet, Microsoft’s Satya Nadella appeared confident in his CNBC interview, at least about his company’s $80 billion contribution.
Is the $500 investment just the first step?
Finally, looking at Altman’s previous call for action, The Stargate Project might be merely a prelude to an even greater investment in artificial intelligence.
In early 2024, he called on all entities in the world – private and public – to help OpenAI vastly improve the global AI infrastructure with an unprecedented $5 to $7 trillion investment in the industry.
Though $500 billion is significantly smaller than initially called for – though, admittedly, it remains a gargantuan investment – the large number of firms involved and the fact that Microsoft is participating despite losing its status as OpenAI’s sole cloud provider demonstrates the great appetite for the technology.
Featured image via Shutterstock
