Stargate Project: Microsoft Gains, Oracle Waits, Data Centers Face Long-Term Questions

The tech world is abuzz with President Trump's announcement of the Stargate Project, a $500 billion initiative aimed at catapulting the U.S. to AI supremacy. This ambitious venture, led by SoftBank, OpenAI, and Oracle, has immediate implications for key tech players like Microsoft and Oracle, as well as data centers. Let's delve into the potential impacts and long-term questions surrounding this groundbreaking project.



Microsoft: Early Bird Catches the Worm

As an early investor in OpenAI, Microsoft stands to gain significantly from the Stargate Project. The company has already committed heavily to AI infrastructure, and the new project reinforces its existing advantages. According to Goldman Sachs analyst Kash Rangan, "Being early to market and operational scaling experience is important" for Microsoft (Benzinga, 2025).

The updated terms of Microsoft's partnership with OpenAI mitigate risks while maintaining significant upside. Rangan highlights that "From a financial perspective, MSFT gets to keep the equity upside while minimizing if not eliminating the risk given its involvement at ground zero with more parties stepping though Stargate to alleviate the capital burden" (Benzinga, 2025). This strategic advantage allows Microsoft to share the financial burden of the project while still benefiting from the equity upside.

Moreover, Microsoft's partnership with OpenAI provides it with access to leading AI models and technologies. The OpenAI API is exclusive to Azure, runs on Azure, and is also available through the Azure OpenAI Service. This agreement ensures that customers benefit from having access to leading models on Microsoft platforms and direct from OpenAI (Microsoft, 2025). Additionally, Microsoft continues to have rights to OpenAI IP (inclusive of model and infrastructure) for use within its products like Copilot.



Oracle: Long-Term Potential, Near-Term Uncertainties

While Oracle stands to benefit from increased demand for AI services, Rangan cautions that these benefits may take time to materialize. "It could not be until 2028 that Oracle gets to experience material benefits from the Stargate JV," he notes (Benzinga, 2025). This lengthy timeline is partly attributed to the substantial lead time required for the construction of necessary datacenter equipment, which has a lead time of around three years.

Furthermore, the analyst highlighted uncertainties surrounding Oracle's financial commitments to the project, noting that its planned CapEx of over $15 billion in fiscal-year 2025 may need upward revisions. These uncertainties suggest that Oracle's financial commitments could evolve over time, with potential increases in CapEx and other investments as the project progresses.

Data Centers: Short-Term Boost, Long-Term Questions

The Stargate Project presents a mixed bag for datacenter operators like Digital Realty Trust and Equinix. In the short term, the project could provide a boost, driven by tighter supply-demand dynamics in the market. However, the long-term impact remains uncertain, as the investment bank flagged the risk of shifting away from outsourced data centers.

If OpenAI, which may utilize third-party providers like Digital Realty, decides to primarily leverage the infrastructure built by the Stargate Project, it could significantly diminish the demand for external data center services. This shift could disrupt the existing market dynamics and pose a potential threat to the long-term growth of companies like Digital Realty.



In conclusion, the Stargate Project has significant implications for key tech players like Microsoft and Oracle, as well as data centers. While Microsoft stands to gain from its early involvement and strategic partnerships, Oracle faces near-term uncertainties and a lengthy timeline for material benefits. Data centers, meanwhile, face long-term questions surrounding the potential shift away from outsourced services. As the project progresses, investors and stakeholders will closely monitor its developments and the evolving market dynamics.