Stargate ‘not a material negative’ for Microsoft, positive for Oracle, says BofA

After President Trump announced the formation of “Stargate,” a “new American company that will invest $500B at least in AI Infrastructure in the United States,” BofA notes that the project is focused on building AI infrastructure with initial equity funders OpenAI, Softbank (SFTBY), Oracle (ORCL) and MGX. BofA analyst Brad Sills says the partnership provides potential scale benefits to Oracle, but adds that details and terms for the agreement were not provided and says it is “unclear where funding for an investment of this scale would come from.” The firm, which also notes that Microsoft (MSFT) stated in a blog that the key terms of the Microsoft OpenAI partnership are unchanged, does not view this joint venture as “a major loss to Microsoft.” Microsoft stated that as part of a new commitment by OpenAI, the companies have made changes to the exclusivity on new capacity, moving to a model where Microsoft has a right of first refusal, adds BofA, which keeps a Buy rating and $510 price target on Microsoft shares.