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

Microsoft and OpenAI are teaming up for a monumental data-center project that is estimated to cost a staggering $100 billion. Central to this initiative is the development of an advanced artificial intelligence supercomputer dubbed "Stargate," as per reports. 

According to The Information report familiar with private discussions regarding the proposal, Microsoft is anticipated to spearhead the financing of this ambitious project. The scale of investment would dwarf existing data centers by a factor of 100, signalling a paradigm shift in accommodating the escalating demand for AI-capable infrastructure.

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Rising Demand for Advanced AI Infrastructure

The surge in demand is largely propelled by the rapid integration of generative artificial intelligence technologies, necessitating a new breed of data centers capable of tackling more intricate computational tasks.

OpenAI, slated to introduce its next significant AI upgrade in the coming year, is poised to align its advancements with the rollout of "Stargate," earmarked for a potential launch as early as 2028, according to the report.

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The envisioned supercomputer, based in the United States, is envisioned as the flagship installation among a series of forthcoming projects slated for realisation over the next six years.

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

Microsoft's strategic roadmap for advancing supercomputing capabilities encompasses five distinct phases, with "Stargate" marking the culmination of this evolutionary journey. Preceding it is a fourth-phase supercomputer slated for debut around 2026, specifically tailored for OpenAI's requirements.

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Presently, Microsoft and OpenAI are entrenched in the third phase of their collaborative plan, with a substantial portion of forthcoming expenditures earmarked for the procurement of specialized AI chips crucial for powering these cutting-edge facilities.

Frank Shaw, a spokesperson for Microsoft, underscored the perpetual drive toward innovation in infrastructure essential for pushing the boundaries of AI capabilities. According to the Reuters reports, this ambitious endeavour, projected to exceed $115 billion in costs, represents a monumental leap forward, eclipsing Microsoft's previous year's capital expenditures by over threefold.