Donald Trump's massive investment announcement has sent the AI chip stock market soaring.
AI chip stocks, including industry giants Nvidia, Advanced Micro Devices, and Taiwan Semiconductor Manufacturing Co., all posted huge gains on Tuesday (15 July).
The surge came after reports emerged about President Trump's plans to announce a colossal $70 tech and energy investment plan in Pennsylvania. Many are now calling this a real breakthrough for the tech scene in the US.
This was also a result of the US government’s decision to lift certain chip export restrictions to China.
What's in Trump's $70 billion plan?
According to Bloomberg reports, the investment package covers several areas that form the backbone of AI development.
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The plan includes funding for new AI data centres, the expansion of power generation capabilities and upgrades to grid infrastructure, Bloomberg reported. Additionally, the plan introduces new training programs and apprenticeships to ensure a skilled workforce is ready to build and maintain the infrastructure.
How does this fit into Trump's broader AI strategy?
Trump's bold strategy is to motivate private investors to invest in projects rather than relying solely on government funding. At the same time, he aims to make the approval process smoother by reducing the red tape that has traditionally slowed down large tech initiatives.
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Senator David McCormick, at Carnegie Mellon University, is set to host the upcoming event, which is expected to draw around 60 top executives from giants like BlackRock, Palantir Technologies, ExxonMobil, and Chevron.
Meanwhile, Blackstone President Jon Gray is anticipated to announce his own $25 billion initiative specifically targeting data centre and energy infrastructure expansion.
By doing so, this project is predicted to create thousands of construction and permanent jobs.Also, because the US government decided to relax some restrictions on selling computer chips to China, companies like Nvidia have skyrocketed in the stock market.
Gene Munster, managing partner at Deepwater Asset Management, thinks this change could boost Nvidia's growth estimates by about 10%.
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He said it's 'great news' for the company 'either way you look at it.'
To understand why this is such big news, you need to know how much money was at stake.
Nvidia lost a whopping $4.5 billion in the first quarter of this year alone because of the ban on selling their H20 chips to China.
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That's an enormous amount of money for any company to lose, so lifting these restrictions essentially removes a major obstacle to Nvidia generating revenue again.
What does this mean for you?
You might be wondering why any of this matters if you're not a tech investor. Well, AI technology is used in everything from the GPS in your car to the recommendations you get on Netflix. Better AI infrastructure could mean faster and more reliable AI services and opportunities for everyone.
But like any major plan, success will depend on how well it's executed.