AI Daily: OpenAI’s Stargate deal seen as shift away from Microsoft

Musk says companies “don’t actually have the money” to back up their pledge to invest $500B in U.S. AI infrastructure

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

STARGATE JV: Microsoft’s (MSFT) absence from OpenAI’s Stargate announcement follows months of tension between the two companies and signals an era where the partners will be less reliant on one another, Tom Dotan and Deepa Seetharaman of The Wall Street Journal reported. At a White House press conference, the ChatGPT maker announced Stargate, which is a new venture with Oracle (ORCL) and SoftBank (SFTBY). Stargate intends to spend up to $500B building new data centers in the U.S. to help with OpenAI’s development.

Meanwhile, Tesla (TSLA) and SpaceX’s CEO Elon Musk said OpenAI, Oracle and Softbank “don’t actually have the money” to back up their pledge to invest $500B in U.S. AI infrastructure after President Donald Trump touted the joint venture, dubbed the Stargate project, on the first full day of his second term, CNBC’s Kevin Breuninger reports. “SoftBank has well under $10B secured. I have that on good authority,” Musk said. On Wednesday morning, OpenAI CEO Sam Altman replied directly to Musk, saying that while he genuinely respects “your accomplishments and think you are the most inspiring entrepreneur of our time,” Musk’s claim about Softbank’s liquidity was “wrong, as you surely know.” Musk’s post about Softbank was “far off base,” according to a person familiar with the AI project.

MOST DISCUSSED WINNER: Piper Sandler says Arista Networks (ANET) will likely be the most discussed “winner” of Stargate within the firm’s coverage given the exposure to hyperscalers and AI vendors already, including Microsoft, Meta (META), Oracle, Apple (AAPL), and OpenAI, and strength of its high-end Ethernet switching portfolio. Given switching represents over 50% of networking spend and Arista’s more than 30% share of high-end datacenter switching, Piper sees this as a +$6B SAM over 5 years or $1.25B annually.

AI PORTFOLIO EXPANSION: Parsons (PSN) announced that the company has entered into a Cooperative Research and Development Agreement CRADA with the U.S. Army Command, Control, Communications, Computer, Cyber, Intelligence, Surveillance and Reconnaissance C5ISR Center in support of Project Linchpin, the Army’s emerging Artificial Intelligence and Machine Learning AI/ML Program. Under the CRADA, Parsons will examine diverse datasets, models, and deployment scenarios to determine the optimal metrics, specifications, and governance for AI/ML operational use cases provided by the Project Linchpin Program. The company will also collaboratively research with C5ISR and Project Linchpin, deployment and model monitoring standards to support streamlined ML operations across the Army community, fostering a mature and repeatable process to integrate AI/ML effectively into Army Systems of Record.

STOCK CONSIDERATIONS: JPMorgan raised the firm’s price target on IBM (IBM), while keeping a Neutral rating on the shares as part of a Q4 earnings preview. The firm expects “healthy” software and artificial intelligence business for Q4, offset by soft consulting, the tail end of a mainframe cycle, and uncertainty around the level of near-term dilution from pending acquisitions. Expectations for IBM “remain reasonable” as consensus estimates imply revenue growth of 1.6% year-over-year for Q4 reflecting consulting and infrastructure softness, JPMorgan tells investors in a research note.

Wedbush raised the firm’s price target on Palantir (PLTR). The firm says growing confidence in the company’s artificial intelligence strategy “is key to the bull thesis” on Palantir for 2025. Wedbush believes Palantir has a path to “become the next Oracle or Salesforce” over the coming years. While the stock’s valuation is expensive today, Palantir, or the “Messi of AI,” will be a core winner in the trillions of AI spend over the next few years, the firm tells investors in a research note. Wedbush says Palantir remains one of its top names to own in 2025 due to its “game-changing” Artificial Intelligence Platform strategy, which it believes is “quickly becoming a key foundational platform for enterprises heading down the AI use case path across verticals.” The firm believes the Street is underestimating the $1B-plus revenue stream that Palantir’s Artificial Intelligence Platform U.S. commercial business can evolve into over the next few years and its technology “competitive moat.”

Roth MKM says Real Brokerage (REAX) is positioned for “robust growth” in Q4 and 2025, driven by agent growth, artificial intelligence integrations boosting agent productivity, and its consumer-facing app. The company’s momentum continued into 2025 having surpassed 25,000 agents in January, positioning it as a market leader and driving multiple expansions, the firm tells investors in a research note. Roth believes that while Real Brokerage’s Q4 margins may face pressure due to AI investments, 2025 is expected to see improved profitability. It thinks the company’s technology and artificial intelligence is underappreciated by investors heading into 2025.

Originally Posted January 23, 2025 – AI Daily: OpenAI’s Stargate deal seen as shift away from Microsoft

Go Source