Microsoft & OpenAI Set to Plan Billion-Dollar AI Data Centre

Details of the ‘Stargate’ project are scarce, but a data centre at this scale highlights how Microsoft and OpenAI continue to deepen their partnership
Microsoft and OpenAI are said to be working on plans for a data centre project that could cost as much as US$100bn and include an AI supercomputer

According to a report by The Information, the rumoured data centre is expected to power AI by OpenAI. 

Microsoft is expected to be financing the project, in the wake of announcing plans to invest billions of dollars into AI-led data centres in 2024. Dubbed the ‘Stargate’ project, it is expected that the data centre could be in operation as soon as 2028.

The report suggested that this new project would be designed to work with chips from a range of different suppliers, perhaps instead of relying on leading chipmaker Nvidia.

Keeping data centres competitive in an AI-driven world

Details of the ‘Stargate’ project are scarce, but a data centre at this scale highlights how Microsoft and OpenAI continue to deepen their partnership across all areas of AI development.

It is no secret that Microsoft is continuing to both rapidly and strategically expand its global investments, having recently overtaken Apple as the world’s most valuable public company. Its 49% stake in OpenAI and new non-voting, observer position on its board of directors highlights that the organisation intends to continue funding innovation in 2024.

Microsoft is continually supporting OpenAI’s endeavours, which includes the supply of computing resources for the AI startup to run its models.

With five design phases for this series of supercomputers, the Stargate project will represent more than three-times the amount of money Microsoft spent on data centre servers, buildings, infrastructure and equipment in 2023 combined.

The tech giant is also working on a smaller supercomputer to OpenAI that aims to launch in 2026.

“We are always planning for the next generation of infrastructure innovations needed to continue pushing the frontier of AI capability,” said a Microsoft spokesperson, quoted by Reuters.

Microsoft remains at the front of digital progress

Microsoft, alongside competitor data centre companies, has been continually looking for ways to meet the continued demand for high-performance computing (HPC) that supports AI workloads and applications. This commitment can mean overhauling legacy data centres and making expansions and improvements so that they can efficiently support customers.

The company recently partnered with Vodafone in order to enhance data centre strategies to bring Gen AI, digital services and the cloud to more than 300 million businesses and consumers across Europe and Africa.

In November 2023, Microsoft announced a duo of custom-designed computing chips for its cloud infrastructure. The custom chips were designed to power Azure data centres and support its enterprise customers in their AI endeavours.

These efforts remain poignant within the data centre industry, as leading companies seek to compete with Nvidia chips. Nvidia itself recently launched a next-generation AI supercomputer powered by the company’s new Blackwell superchips to further accelerate enterprise AI.

Nvidia’s data centre business generated the majority of its total revenue in recent months, hitting revenues of US$22.10bn, with data centre revenue increasing by 409% to US$18.4bn.


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