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Microsoft and OpenAI build mega datacenter

by Pieter Werner

Microsoft and OpenAI are undertaking a collaborative effort to significantly upgrade their data centers. This ambitious plan, reportedly involving an investment of around $115 billion, aims to substantially expand the capacity for AI services. A highlight of this initiative is the development of an AI supercomputer named Stargate.

Sources familiar with the project’s financial details, indicate that Microsoft is contributing the majority of the funding for this expansive data center project. The reported investment surpasses Microsoft’s expenditure last year on servers, infrastructure, and other equipment by more than threefold.

Microsoft’s partnership with OpenAI, where it is a major investor, has been ongoing. Microsoft incorporates OpenAI’s AI models in its digital assistant Copilot. Previously, the two companies established a five-phase plan, currently in its third stage. The bulk of the investment in the remaining phases is earmarked for acquiring advanced AI chips.

The next major AI upgrade from OpenAI is scheduled for early next year. Following this, the focus will shift to developing the AI supercomputer Stargate, with a projected launch by Microsoft in 2028. Stargate is expected to be the most powerful in a series of installations planned by Microsoft and OpenAI over the next six years. Another, smaller supercomputer dedicated to OpenAI is anticipated to be operational by 2026.

A spokesperson for Microsoft commented on the initiative, highlighting the continuous pursuit of next-generation infrastructure innovations to push the boundaries of AI capabilities. However, both companies have refrained from providing further details on the project.

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