Microsoft, OpenAI plan $100 billion data-center project, media report says

By Thomson Reuters Mar 29, 2024 | 12:35 PM

(Reuters) -Microsoft and OpenAI are planning a data-center project that could cost as much as $100 billion and will include an artificial intelligence supercomputer called “Stargate,” according to a media report on Friday.

The companies did not immediately respond to Reuters’ requests for comment.

The Information reported that Microsoft would likely be responsible for financing the project, which would be 100 times more costly than some of the biggest current data centers, citing people involved in private conversations about the proposal.

OpenAI’s next major AI upgrade is expected to land by early next year, the report said, adding that Microsoft executives are looking to launch Stargate as soon as 2028.

The proposed U.S.-based supercomputer would be the biggest in a series of installations the companies are looking to build over the next six years, the report added.

The Information attributed the tentative cost of $100 billion to a person who spoke to OpenAI CEO Sam Altman about it and a person who has viewed some of Microsoft’s initial cost estimates. It did not identify those sources.

Altman and Microsoft employees have spread supercomputers across five phases, with Stargate as the fifth phase. Microsoft is working on a smaller, fourth-phase supercomputer for OpenAI that it aims to launch around 2026, according to the report.

Microsoft and OpenAI are in the middle of the third phase of the five-phase plan, with much of the cost of the next two phases involving procuring the AI chips that are needed, the report said.

“We are always planning for the next generation of infrastructure innovations needed to continue pushing the frontier of AI capability,” Frank Shaw, a Microsoft spokesperson, said in a statement to the publication.

The proposed efforts could cost in excess of $115 billion, more than three times what Microsoft spent last year on capital expenditures for servers, buildings and other equipment, the report stated.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Paul Simao)