Microsoft And OpenAI Plan $100B AI-Centric Data Center: Report

Microsoft and OpenAI are building a massive $100 billion data center and supercomputer to take their artificial intelligence capabilities to the next level.

The world’s most expensive data center project is underway as AI juggernauts Microsoft and OpenAI are building a supercomputer facility to take AI to the next level for a price tag of over $100 billion.

The goal is to build a data center campus in five phases that can enable the most powerful AI offerings and models for the future, including a next-level AI supercomputer—dubbed Stargate—that is set to be operational in 2028. The Information was first to report on the news.

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

[Related: Microsoft Moves More Leaders Around After Suleyman AI CEO Hiring]

Microsoft And OpenAI’s $100 Billion Data Center

The AI-centric data center will handle more advanced computing tasks compared with traditional hyperscale data centers and will reportedly house millions of specialized server chips to enable OpenAI’s artificial intelligence capabilities.

The location of the planned data center project is unknown at this time but will be built in the U.S. Microsoft, as well as its largest AI competitors like AWS and Google, are all pouring billions into building new data centers that power their technology and expand customer footprints.

AI chips that would power such a data center and supercomputer are pricey. For example, Nvidia’s latest Blackwell B200 AI chips will be priced between $30,000 and $40,000.

The data center project and Stargate supercomputer will be designed to work with chipsets from different microprocessor suppliers, including AMD as well as in-house server chips from Microsoft, according to the report.

“We’ve moved from talking about AI to applying AI at scale,” said Microsoft Chairman and CEO Satya Nadella during his company’s second-quarter Fiscal Year 2024 earnings report earlier this year. “By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.”

Microsoft is reportedly looking at alternative power sources, including nuclear energy, to power its supercomputing abilities.

Microsoft Will Fund $100 Billion Project; Use Nvidia And Others For Chips

Microsoft is reportedly responsible for financing the project. The software giant has already committed more than $13 billion to OpenAI over the years.

Reports indicate the Stargate project could cost over 100 times to operate compared with a typical large data center with an investment price tag of over $100 billion.

Both companies will work on the project across five phases, with Stargate as the fifth phase.

OpenAI and Microsoft are currently working on the third phase of the five-phase plan with the two companies now working on procuring the AI chipsets that they need. In addition, Microsoft and OpenAI are working on a smaller AI supercomputer project for its fourth phase that could launch in 2026.

The timeline for this U.S.-based data center to go online looks to be in 2028 and the project will be expanded through 2030.

Microsoft generated $62 billion in revenue during its second fiscal quarter, an increase of 18 percent year over year.