SoftBank Rockets 10% On Tokyo Exchange As Oracle's $455 Billion AI Stargate Deals Spark Investor Frenzy
News Summary
SoftBank Group shares surged 9.98% on Thursday's Tokyo trading session, adding to massive year-to-date gains of 93.90%. Investors are betting on SoftBank’s pivotal role in Oracle Corp.’s record-breaking artificial intelligence infrastructure deals. Oracle’s first-quarter results revealed a stunning $455 billion backlog in Remaining Performance Obligations (RPO), a 359% year-over-year increase. This surge is attributed to four multi-billion-dollar contracts with three customers, including significant deals with AI companies requiring substantial cloud infrastructure. The Stargate project, a $500 billion AI infrastructure venture between Oracle, OpenAI, and SoftBank Group, aims to build extensive AI data centers across the United States. President Donald Trump announced this initiative in January, with SoftBank positioned as a key financial partner. Following Oracle’s earnings, Wall Street analysts substantially raised their price targets for the company.
Background
SoftBank Group has a long-standing reputation for aggressive investments in technology, particularly through its Vision Fund, demonstrating a keen interest in AI-related ventures. Oracle has been proactively expanding its cloud infrastructure (OCI) in recent years, aiming to compete with major players like Amazon Web Services (AWS) and Microsoft Azure, especially for enterprise-grade and compute-intensive artificial intelligence workloads. The current (2025) U.S. administration under President Donald Trump has consistently emphasized fostering domestic technological development and strategic partnerships to ensure American leadership in critical technology sectors. The demand for AI infrastructure, specifically data centers and high-performance computing capabilities, is experiencing explosive growth, becoming a focal point of global tech competition.
In-Depth AI Insights
What does the Stargate project signify for SoftBank, especially given its history of volatile investment performance? - The Stargate project positions SoftBank as a crucial financial partner in a $500 billion venture with Oracle and OpenAI. This marks a significant pivot in SoftBank's investment strategy, moving from fragmented, early-stage investments towards large-scale, national-strategic infrastructure development with established industry giants. - This investment could provide SoftBank with a more stable and predictable source of cash flow and asset value growth. The collaboration with Oracle and OpenAI, coupled with U.S. government backing, mitigates some of the risks typically associated with early-stage tech investments and lends significant credibility to its balance sheet. - Given the Trump administration's view of Stargate as a national strategic imperative, SoftBank's involvement is likely to benefit from favorable U.S. policy and regulatory support, potentially laying the groundwork for its long-term expansion in the American market. What are the deeper implications of Oracle's record-breaking backlog for the AI infrastructure competitive landscape? - Oracle's $455 billion backlog suggests significant market share gains for its Oracle Cloud Infrastructure (OCI), particularly among large-scale AI customers with stringent performance and data sovereignty requirements. This challenges the long-standing dominance of AWS, Azure, and GCP. - This massive order book indicates an immense demand for specialized cloud infrastructure for AI training and inference. Oracle has likely succeeded by offering customized solutions, bare-metal services, or competitive pricing strategies that appeal to AI giants requiring vast, dedicated computing resources. - The Stargate project itself serves as a colossal validation of Oracle's cloud capabilities, which will solidify its position as a premier AI infrastructure provider and likely attract more enterprise clients seeking high-performance AI solutions. What are the strategic considerations and potential impacts of President Donald Trump personally announcing the Stargate project? - President Trump's involvement underscores the central role of AI infrastructure development in U.S. national strategy, particularly in his pursuit of "America First" and domestic technological leadership. This move aims to ensure critical AI capabilities remain on U.S. soil and under American control. - This public endorsement could provide significant political momentum for the Stargate project, ensuring priority in regulatory approvals, resource acquisition, and potential government contracts. It also sends a strong signal to international markets about U.S. determination for AI leadership, potentially prompting other nations to accelerate their own AI infrastructure efforts. - SoftBank, as a key financial partner, enhances its strategic influence within the U.S. by participating in this presidential-backed initiative. This could help SoftBank gain broader trust and partnership opportunities in the U.S. market, especially given its substantial long-term portfolio of American technology companies.