Microsoft and OpenAI are working on a new AI supercomputer

Bengaluru — Microsoft and OpenAI are working on plans for a data centre project that could cost as much as $100bn and include an artificial intelligence (AI)  supercomputer called “Stargate” set to launch in 2028, The Information reported on Friday.

OpenAI did not immediately respond to Reuters’ requests for comment.

Rapid adoption of generative AI technology has led to rocketing demand for AI data centres capable of handling more advanced tasks than traditional data centres.

The Information reported that Microsoft would likely finance the project, which is expected to be 100 times more costly than some of the biggest existing data centres, citing people involved in private conversations about the proposal.

The proposed US-based supercomputer would be the biggest in a series the companies are looking to build over the next six years, the report added.

The Information attributed the tentative cost of $100bn to a person who spoke to OpenAI CEO Sam Altman about it and a person who has viewed some of Microsoft’s initial cost estimates. It did not identify those sources.

Altman and Microsoft have spread the supercomputers across five phases, with Stargate as the fifth phase. Microsoft is working on a smaller, fourth-phase supercomputer for OpenAI to be launched around 2026, according to the report.

Microsoft and OpenAI are in the middle of the third phase of the five-phase plan, with a significant portion of the cost for the next two phases involving acquiring the needed AI chips, the report said.

AI chips are often sold at high prices.

Jensen Huang, CEO of chip company Nvidia, told CNBC earlier in March that the latest “Blackwell” B200 artificial intelligence chip will be priced between $30,000 and $40,000.

Microsoft had also announced a duo of custom-designed computing chips in November last year.

The report said the new project would be designed to work with chips from different suppliers.

“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 an emailed statement to Reuters. The spokesperson did not comment directly on the report about the planned launch of the Stargate supercomputer.

Expenses for the plan could exceed $115bn,  more than triple Microsoft’s expenditure last year on capital spending for servers, buildings and other equipment, the report stated.

Reuters