Musk’s Skepticism Clouds Trump’s AI Plan – What’s Next for Nasdaq and Tech Stocks?

Is Trump’s $500 Billion AI Plan Built on Solid Ground?

President Donald Trump’s announcement of a $500 billion AI infrastructure initiative, dubbed “Stargate,” has generated a media frenzy and a short-term boost for some tech stocks. Promising to revolutionize America’s AI landscape, the plan involves investments from SoftBank, OpenAI, Oracle, and MGX, aiming to construct massive data centers to accelerate artificial general intelligence (AGI). However, Elon Musk’s sharp criticism has cast doubt on the viability of this ambitious project, potentially dampening investor enthusiasm.

Why Is Elon Musk So Critical of Stargate?

Musk, who was notably absent from the announcement, wasted no time attacking the project. On his social media platform, he alleged that the backers “don’t actually have the money” and singled out SoftBank for having “well under $10 billion secured.” Musk’s public feud with OpenAI CEO Sam Altman, a former colleague and current legal adversary, adds a layer of personal and competitive tension to his critique. Musk has previously accused OpenAI of straying from its nonprofit mission to pursue private commercial interests.

Altman dismissed Musk’s claims, emphasizing substantial funding commitments from SoftBank, Oracle, and others. Despite this, Musk’s remarks have fueled uncertainty. Investors are now questioning whether the $500 billion figure represents tangible financial commitments or speculative aspirations.

Could Musk’s Criticism Shake Up AI Stocks?

The AI announcement initially boosted shares of major tech players like Oracle, Microsoft, and ARM Holdings, as traders bet on increased demand for semiconductors and AI infrastructure.

However, Thursday’s pre-market trading has shown signs of hesitation, with Oracle down 1.43% and ARM losing 4.59%, signaling doubts about the project’s execution. Tesla, a company led by Musk, has also seen declines, possibly reflecting investor concerns over a potential rift between Trump and Musk.

The uncertainty is compounded by the lack of details on how funding will be raised. While the companies involved boast strong balance sheets, significant debt or external equity could be required to meet the lofty $500 billion goal. Without clarity, traders may view Stargate as more aspirational than actionable.

Is This Really a Game-Changer or Just a PR Move?

Skepticism is growing about whether Stargate is truly a transformative project or merely an infrastructure build-out masked as a technological revolution. Experts note that the initiative appears focused on scaling existing operations rather than achieving groundbreaking AI research. This distinction is crucial for investors looking to capitalize on the next phase of AI development.

What Should Traders Watch for Next?

In the short term, the focus will be on how the market digests Musk’s criticism. If key stocks like Oracle, ARM, and Nvidia reverse sharply lower in the coming days, it may signal that traders share Musk’s skepticism. Additionally, the performance of semiconductor stocks and the Nasdaq will be critical indicators of broader sentiment toward the project.

While it’s too early to draw definitive conclusions, traders should watch for follow-through in the markets. If the rally falters, it could be a sign that where there’s smoke, there’s fire. For now, the reaction of key AI-related stocks will provide the clearest clues about whether Stargate is a game-changer or merely a headline-grabbing promise.

More Information in our Economic Calendar.