Microsoft and OpenAI to launch $100 billion AI data center project with 'Stargate' supercomputer

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Microsoft and OpenAI are teaming up for a monumental data-center project that could cost $100 billion. Central to this initiative is reportedly the development of an advanced artificial intelligence supercomputer known as “Stargate”.

Microsoft is expected to lead the financing of the ambitious project, according to a report familiar with private discussions regarding the proposal. The scale of the investment dwarfs existing data centers by a factor of 100, representing a paradigm shift in response to growing demand for AI-capable infrastructure.

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Growing demand for advanced AI infrastructure

Demand growth is fueled by the rapid integration of artificial intelligence technologies, requiring a new breed of data centers that can handle more complex computational tasks.

OpenAI, which will introduce its next significant AI upgrade in the coming year, is set to align its progress with the rollout of “Stargate,” which is slated for a potential launch by 2028, according to the report.

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The envisioned supercomputer, located in the United States, is envisioned as the flagship installation in a series of projects to be implemented over the next six years.

While specifics of the massive $100 billion investment were attributed to undisclosed sources, discussions with OpenAI CEO Sam Altman and insights into Microsoft's preliminary cost estimates indicated the monumental scale of the effort.

Microsoft's strategic roadmap for developing supercomputing capabilities consists of five distinct phases, with “Stargate” representing the culmination of this evolutionary journey. Before that, a fourth-stage supercomputer is slated for launch by 2026, specifically designed to meet the needs of OpenAI.

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Currently, Microsoft and OpenAI have settled on the third phase of their collaboration plan, earmarking a significant portion of the upcoming costs for procurement of specialized AI chips critical to powering these state-of-the-art facilities.

Microsoft spokesperson Frank Shaw emphasized the permanent drive toward innovation in the infrastructure needed to push the boundaries of AI capabilities. Reuters reports that the ambitious endeavor is expected to exceed $115 billion, representing a monumental leap forward, tripling Microsoft's previous year's capital expenditures.

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