Microsoft (MSFT) has notably been absent from President Trump‘s announcement of the “Stargate” initiative. Stargate is a multibillion-dollar artificial intelligence initiative led by OpenAI, SoftBank Group (SFTBY), and Oracle (ORCL). Although MSFT was acknowledged as a tech partner for the initiative, the tech giant has not made any commitment to fund the initiative.
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This shift signals Microsoft’s diminishing enthusiasm to bear the rising costs for OpenAI’s ambitious AI projects. OpenAI is increasingly looking for more funding as it needs more computing capacity to fulfill some of its more ambitious AI projects.
MSFT Adjusts Partnership with OpenAI
Following the announcement of Stargate, MSFT announced in a separate blog post that it was tweaking some key parts of its deal with OpenAI. Going forward, MSFT will not be the exclusive provider of cloud computing infrastructure for OpenAI. Despite this shift, Microsoft remains a major investor in OpenAI and contributed $750 million to OpenAI’s recent $6.6 billion funding round.
Notably, Microsoft continues to hold a significant share of OpenAI’s revenue and retains access to its advanced AI models, even if these models are developed on infrastructure financed by other partners such as SoftBank or Oracle.
Given these developments, the Stargate initiative provides Microsoft with a unique opportunity to redistribute OpenAI’s AI-related expenditures to its competitors. This is a positive development for the company that has a $80 billion capital expenditure commitment this fiscal year.
When asked about the Stargate venture, Microsoft CEO Satya Nadella responded to CNBC, “Look, all I know is I’m good for my $80 billion.”
Musk and Altman Clash Over Stargate AI Project
Meanwhile, in a separate development, Elon Musk and OpenAI CEO Sam Altman are clashing over the Stargate AI infrastructure project, endorsed by President Donald Trump.
Following the announcement, Musk, a close Trump adviser and leader of a government cost-cutting initiative, criticized the project’s financial viability. “They don’t actually have the money,” Musk wrote on his social platform X. “SoftBank has well under $10B secured. I have that on good authority.”
In response, Altman called Musk’s claims “wrong, as you surely know,” and invited him to visit the first Stargate site already under construction in Texas. He added, “This is great for the country. I realize what’s great for the country isn’t always what’s optimal for your companies, but in your new role, I hope you’ll mostly put America first.”
Which Stargate Stock Has the Most Upside Potential?
Turning to Wall Street, out of the three stocks mentioned above, analysts think that MSFT stock has the most room to run. In fact, MSFT’s average price target of $509.42 per share implies more than 14.2% upside potential. On the other hand, analysts expect the least from SFTBY stock, as its average price target of $32.20 equates to a downside potential of 5.6% from current levels.
