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Microsoft

It seems that OpenAI’s ChatGPT and Sora, among other projects, are about to receive a significant boost. According to a new report shared by The Information, Microsoft and OpenAI are working on a new data center project, and one part of it will be a massive AI supercomputer known as “Stargate.” It is said that Microsoft is covering the costs, and the name of the supercomputer itself indicates the astronomical expense – the entire project might cost over $100 billion.

Spending over $100 billion on anything is truly mind-blowing, but when put into perspective, the price vividly shows just how grand and ambitious this venture might be: The Information claims that the new joint Microsoft and OpenAI project could cost a whopping 100 times more than some of the largest data centers currently in operation.

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That estimate reportedly comes from those in the know and involved in discussions about the project, including someone who had conversations with Sam Altman, the CEO of OpenAI, as well as someone with access to Microsoft’s initial cost analysis. The publication chose to keep the sources anonymous.

The Stargate supercomputer is said to be located in the US and, as per Reuters, it will be the largest among many installations that Microsoft and OpenAI are preparing to build over the next few years. Stargate is likely to be launched as early as 2028, but before that happens, OpenAI will still receive periodic upgrades, with its next major AI update planned for early 2025.

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Stargate marks the fifth and final (for now) phase of Microsoft and OpenAI’s supercomputer projects, and the companies are currently in the middle of the third phase. Microsoft is reportedly already working on the fourth-phase supercomputer, which will be smaller than Stargate and might be launched by 2026.

It’s not clear exactly what capabilities Stargate might possess, but given the current AI boom and the need for AI models to continuously evolve, it’s hardly a surprise. GPT-5 is on the horizon, and for OpenAI and Microsoft to keep pushing the boundaries of AI, these massive data centers are a necessity.

Since the joint venture is expected to cost more than $115 billion in the end, it’s worth noting that such an expenditure would amount to more than three times what Microsoft spent on capital expenditures for buildings, equipment, and servers during 2023. So where will all that money go? The Information claims that the majority of the cost of this five-phase plan comes from the need to purchase AI chips. In that regard, it’s a great time for Nvidia.