Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Microsoft, OpenAI to Develop $100 Bln Data Center

Sun 31 Mar 2024 | 05:57 PM
Israa Farhan

A recent report has unveiled plans by Microsoft and OpenAI to collaborate on a groundbreaking data center project valued at about $100 billion.

This ambitious initiative includes the development of a massive AI-driven computer named "Stargate," scheduled for launch in 2028, according to sources familiar with the matter.

The rapid adoption of generative AI technology has led to a significant increase in demand for advanced AI data centers capable of handling complex tasks beyond the capabilities of traditional data centers.

Sources involved in private discussions about the project indicate that Microsoft is expected to fund the venture, which is projected to be 100 times more expensive than some of the largest existing data centers.

The proposed colossal computer, headquartered in the United States, will serve as the flagship in a series of planned developments over the next six years. Initial cost estimates of $100 billion were shared by individuals briefed on the matter and those familiar with Microsoft's preliminary cost projections.

Microsoft and OpenAI are currently progressing through the third stage of the five-stage plan, with substantial costs anticipated for the subsequent phases, primarily attributed to the acquisition of necessary AI chips.

AI chips often come with hefty price tags. Jensen Huang, CEO of chip giant Nvidia, disclosed earlier in March that the latest AI chip, "Blackwell" B200, carries a price range of $30,000 to $40,000.

In addition to the Stargate project, Microsoft had previously announced the development of two custom computing chips in November last year.

The new undertaking is engineered to integrate with chips from various suppliers. A Microsoft spokesperson conveyed that the company is consistently laying the groundwork for the next wave of infrastructure innovations essential for pushing the boundaries of AI capabilities.

While refraining from direct comments on the planned launch of the Stargate supercomputer, the report hints at expenses for the initiative potentially surpassing $115 billion, more than triple Microsoft's capital expenditure on servers, infrastructure, and related equipment in the previous year.