NVIDIA's AI Infrastructure Supremacy: Riding the Stargate and Cross-Border Compute Wave

The global AI infrastructure boom is no longer a distant horizon—it is here. At its epicenter sits NVIDIA, the undisputed king of AI chips, whose GPUs power everything from OpenAI's Stargate megaproject to China's open-source AI upstarts like DeepSeek. But as regulatory regimes shift and cross-border investments surge, the question for investors is clear: How sustainable is NVIDIA's dominance, and where are the hidden opportunities in this compute-driven landscape?

The Stargate Project: NVIDIA's $500B Growth Engine

The SoftBank-OpenAI Stargate venture, announced in 2023, represents the single largest AI infrastructure bet in history. Its $500 billion price tag hinges entirely on GPU capacity—and NVIDIA is the sole supplier of the chips required for its 1.2 gigawatt data center in Abilene, Texas. This site alone, developed with Crusoe Energy Systems, will require billions in GPU spending, with NVIDIA's H100 and H20 chips at the core of its compute stack.

The project's timeline and scope are staggering: 20 data centers by 2029, 357 jobs per site, and a direct pipeline to U.S. government support under President Trump's “AI supremacy” agenda. For NVIDIA, this is a guaranteed revenue stream. But Stargate's success also depends on solving a critical bottleneck: energy. Data centers now consume 2% of global electricity, and Abilene's gas-powered cooling systems highlight the risk of rising power costs.

H20 Chips and the China Factor: A Regulatory Balancing Act

NVIDIA's recent resumption of H20 chip sales to China marks a pivotal shift in U.S.-China tech relations. After a year of export restrictions, the $5.5 billion in inventory write-offs and lost sales have now been reversed. This decision, tied to a broader trade deal relaxing rare earth exports from China, underscores a strategic reality: China's AI ecosystem cannot be ignored.

DeepSeek, the open-source AI startup that undercut OpenAI's cost structure, already operates on a 50,000-GPU infrastructure including 30,000 H20s. NVIDIA's return to China allows this momentum to accelerate. Yet risks linger: U.S. lawmakers remain divided, and smuggling networks (reportedly moving $100M+ in H100 chips) could destabilize supply chains.

For investors, the calculus is clear: NVIDIA's H20 sales to China represent a $17 billion revenue lever (13% of 2024 fiscal revenue) with upside as Chinese firms like Alibaba and Tencent expand AI services.

Cristal Intelligence: SoftBank's Telecom-AI Play

Masayoshi Son's Cristal Intelligence venture with OpenAI is more than a joint venture—it's a blueprint for AI-driven enterprise transformation. By integrating NVIDIA's GPUs into its AI agents, SoftBank aims to automate 100 million workflows across Japanese firms. The synergy with NVIDIA is twofold:

1. Compute Synergy: Cristal's edge-cloud architecture relies on NVIDIA's Grace Blackwell platform for low-latency AI processing.
2. Infrastructure Synergy: SoftBank's $6.5B acquisition of Ampere Computing (a cloud-native CPU firm) and its Arizona AI megaproject (potentially powered by NVIDIA) create a flywheel effect.

SoftBank's undervalued stock (trading at 0.8x tangible book value) now holds massive hidden assets: its $40B stake in OpenAI, its 75% ownership of Arm, and its equity in Stargate. Pair this with NVIDIA's $1T+ market cap, and the duo represents a leveraged bet on AI's future.

Valuation Gaps and Risks to Monitor

NVIDIA: Despite its dominance, NVIDIA trades at 45x forward earnings—a premium justified only if its data center revenue (now 40% of sales) continues growing at 30%+. The risk? Overcapacity if AI adoption slows.

SoftBank: Its 30% discount to tangible assets (including $85B in cash and stakes in startups) makes it a contrarian play. But execution risks loom: Stargate's energy needs, Cristal's scalability, and U.S.-China tech fractures could derail progress.

Investment Strategy: Play the Compute Stack, Hedge the Risks

1. Core Position: NVIDIA remains the indispensable player. Its GPU duopoly with AMD (though NVIDIA holds ~90% of AI cloud market) ensures recurring revenue from every data center built.
2. Leveraged Play: SoftBank offers asymmetric upside as its assets are revalued. Investors should buy dips below $40/share, targeting a 1.2x book value re-rating.
3. Hedge Against Risks:
4. Short natural gas futures (to offset data center energy costs).
5. Avoid pure-play semiconductor ETFs (e.g., SMH) if AI adoption stumbles.
6. Monitor U.S.-China trade data: A collapse in GPU exports would signal geopolitical fracture.

The AI infrastructure boom is a multi-decade trend, but its near-term trajectory hinges on compute availability, regulatory harmony, and energy economics. NVIDIA and SoftBank are the twin engines of this revolution—but investors must remain vigilant about the headwinds on the horizon.

Final Note: As of Q2 2025, NVIDIA's stock sits near $700/share, while SoftBank trades at $45/share. Both are worth owning—but only if you bet on a world where AI infrastructure wins.