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Microsoft (NASDAQ:MSFT) and OpenAI have been in talks to invest as much as $100B for a data center project that would contain a supercomputer, the biggest in a series of installations the companies plan to establish over the next six years, The Information reported, citing people familiar with the matter.
The planned U.S.-based supercomputer, referred to as “Stargate,” will be designed to house millions of specialized server chips to boost OpenAI’s artificial intelligence capabilities, the people added.
Microsoft (MSFT), which has already committed over $13B to OpenAI, is likely to be responsible for funding the project as part of a five-phase plan that the companies have already undertaken.
The tech giant is developing a smaller, phase 4 supercomputer for OpenAI, expected to launch around 2026 in Mt. Pleasant, Wisc. Microsoft (MSFT) has weighed in on using Nvidia (NASDAQ:NVDA) AI chips for that project, which would cost $10B to complete, according to one person familiar with the matter.
Stargate will be designed to give Microsoft (MSFT) and OpenAI the advantage of using GPUs developed by chipmakers other than Nvidia (NVDA), such as Advanced Micro Devices (NASDAQ:AMD), and even an in-house server chip that MSFT recently launched.
With projects before Stargate requiring significantly lower outlays, the cost of the overall initiative would exceed $115B, which is over three times MSFT’s capital expenditures for servers, buildings, and other equipment last year.
Executives expect to launch Stargate as soon as 2028 and expand it through 2030. They have already discussed alternative power sources, such as nuclear energy, for the supercomputer, which will likely require at least several gigawatts—enough to power at least a few large data centers today—to operate.
MSFT’s commitment to the project will partly depend on OpenAI’s ability to enhance its AI capabilities, one of the people said.
Microsoft (MSFT) and OpenAI didn’t immediately respond to Seeking Alpha’s requests for comments.