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Microsoft and OpenAI plan $100 billion data center project, media report says

:Microsoft and OpenAI are planning a data center project that could cost up to $100 billion and will include an artificial intelligence supercomputer called “Stargate,” according to a news report published Friday.

The companies did not immediately respond to Reuters’ requests for comment.

The Information reports that Microsoft would likely be responsible for financing the project, which would be 100 times more expensive than some of today’s largest data centers, citing people involved in private conversations about the proposal.

OpenAI’s next major AI upgrade is expected to arrive early next year, the report said, adding that Microsoft executives plan to launch Stargate as early as 2028.

The proposed U.S. supercomputer would be the largest in a series of facilities the companies plan to build over the next six years, the report added.

The report attributes the tentative $100 billion cost to someone who spoke to OpenAI CEO Sam Altman about it and to someone who viewed some of Microsoft’s initial cost estimates. He did not identify these sources.

Altman and Microsoft employees divided the supercomputers into five phases, with Stargate being the fifth phase. Microsoft is working on a smaller, fourth-stage supercomputer for OpenAI that it aims to launch around 2026, according to the report.

Microsoft and OpenAI are in the middle of the third phase of the five-phase plan, with much of the cost of the next two phases involving purchasing the necessary AI chips, the report said.

“We are always planning for the next generation of infrastructure innovations needed to continue pushing the boundaries of AI’s capabilities,” Frank Shaw, a Microsoft spokesperson, said in a statement to the publication.

The proposed efforts could cost more than $115 billion, more than three times what Microsoft spent last year on capital expenditures for servers, buildings and other equipment, the report said.

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