Microsoft and Open AI Eye Ambitious $100 Billion AI Project

Tech giants Microsoft and Open AI are reportedly planning a colossal undertaking – a data center project valued at a staggering $100 billion. This project, according to The Information, would culminate in the creation of a ground-breaking artificial intelligence supercomputer dubbed "Stargate" by 2028.

astronomical

The astronomical price tag reflects the project's immense scale. This data center would be specifically designed to handle the ever-growing demands of advanced AI tasks, a field experiencing rapid development fueled by generative AI technology.

Microsoft is expected to shoulder the financial burden of this project, which is estimated to be 100 times more expensive than even the largest existing data centers.

Citing anonymous sources privy to private discussions on the proposal, The Information reports that the proposed U.S.-based supercomputer would be the crown jewel of a series of AI supercomputers envisioned by the two companies over the next six years.

The $100 billion price tag itself comes from two unnamed sources: one who spoke with Open AI's CEO Sam Altman and another who has reviewed initial cost estimates from Microsoft.

Stargate marking

The project is envisioned as a phased rollout, with Stargate marking the culmination in phase five. Currently, Microsoft is reportedly developing a smaller supercomputer for Open AI, slated for launch around 2026, as part of phase four.

A significant portion of the costs for the final two phases is expected to be dedicated to acquiring the specialized AI chips needed to power these supercomputers.

These chips are known for their exorbitant prices – Nvidia's latest "Blackwell" B200 AI chip, for instance, carries a price tag between $30,000 and $40,000.

Microsoft

Microsoft itself forayed into the custom-designed AI chip market last year with the announcement of a new duo.

The report highlights that the new project is designed to be compatible with chips from various suppliers, offering flexibility in its hardware foundation.

While Microsoft declined to directly address

the specifics of the Stargate launch in its official statement, a spokesperson did acknowledge the company's commitment to innovation in AI infrastructure.

$115 billion

The potential expenditure for this project could even surpass $115 billion, exceeding Microsoft's entire capital spending on servers, buildings, and other equipment last year by more than a factor of three.

This ambitious project signifies the immense resources being poured into the future of AI.

The success of Stargate, if realized, could usher in a new era of AI capabilities, with far-reaching implications for various fields.