Microsoft and OpenAI bet $100 billion to free themselves from the shackles and overreliance on the world's most profitable semiconductor chip brand for AI chips

Microsoft and OpenAI logos
(Image credit: Microsoft, OpenAI | MIcrosoft Image Creator)

What you need to know

  • Microsoft and OpenAI have reportedly invested over $100 billion in a new project, Stargate.
  • It's a data center that will help support both companies' AI advances by meeting their high demand for GPUs.
  • The project is expected to launch in 2028 and will reduce the overreliance on NVIDIA for AI chips.

NVIDIA is undoubtedly cashing out as we leap toward the most significant technology revolution with AI. Due to the rising demand for GPUs, the company was ranked as the world's most profitable semiconductor chip brand for Q3 2023. This designation translates to $18.12 billion in revenue and a $10.42 billion profit. 

Admittedly, we're edging closer to a point where NVIDIA can't meet or satisfy the alarmingly high demand for AI chips as more companies warm up and adopt generative AI. 

As it happens, Microsoft and OpenAI have reportedly joined forces to build a data center to support their high demand for chips, facilitate faster AI advances and development, and reduce their overreliance on NVIDIA for chips. 

The project could cost up to $100 billion and possibly be launched in 2028. It'll also feature an AI-powered supercomputer, Stargate (via The Information). The outlet also claims that Microsoft is working on a supercomputer for OpenAI that's significantly smaller than the one highlighted above and is slated to ship in 2026.

What can we expect from Microsoft and OpenAI's new joint effort?

OpenAI Microsoft sinking under water

(Image credit: Windows Central)

While Microsoft and OpenAI haven't confirmed the claims, a Microsoft Spokesman disclosed the company's heavy investment and future with AI when speaking to Business Insider by indicating:

"We are always planning for the next generation of infrastructure innovations needed to continue pushing the frontier of AI capability."

RELATED: Microsoft enters the chip game with its own Arm processors for AI and computing workloads

With this in mind, it's clear that Microsoft isn't planning to back away from its AI-focused efforts anytime soon. The data center will help improve and support the companies' computational needs. As indicated by our sister site, TechRadar, the $100 billion invested in this project is enough to cover Microsoft's expenses on servers and equipment for a whole year. 

According to a separate report by The Next Platform:

"The first thing to note about the rumored "Stargate" system that Microsoft is planning to build to support the computational needs of its large language model partner, OpenAI, is that the people doing the talking – reportedly OpenAI chief executive officer Sam Altman – are talking about a data center, not a supercomputer. And that is because the data center – and perhaps multiple data centers within a region with perhaps as many as 1 million XPU computational devices – will be the supercomputer." 

The Stargate project will have more computing power compared to the existing power supplied by Microsoft to OpenAI from its data centers. While this sounds impressive, reports indicate there won't be enough electricity to power AI advances soon. Reaching such heights in computing will require more power.

Kevin Okemwa
Contributor

Kevin Okemwa is a seasoned tech journalist based in Nairobi, Kenya with lots of experience covering the latest trends and developments in the industry at Windows Central. With a passion for innovation and a keen eye for detail, he has written for leading publications such as OnMSFT, MakeUseOf, and Windows Report, providing insightful analysis and breaking news on everything revolving around the Microsoft ecosystem. You'll also catch him occasionally contributing at iMore about Apple and AI. While AFK and not busy following the ever-emerging trends in tech, you can find him exploring the world or listening to music.

  • fjtorres5591
    2028 is when MS is contracted to receive fusion-generated electricity fom HELION. 50MW+.
    Reply
  • djysrv
    Windows Central said:
    Microsoft and OpenAI have reportedly joined forces to build a data center to support their high demand for chips and facilitate faster AI advances and development, while reducing their overreliance on NVIDIA for chips.

    Microsoft and OpenAI bet $100 billion to free themselves from the shackles and overreliance on the world's most profitable semiconductor chip brand... : Read more
    Is Microsoft & OpenAI's 5GW Stargate supercomputer feasible?

    The project is expected to rely on nuclear reactors to generate the required power for the site's computers.

    https://www.datacenterdynamics.com/en/opinions/is-microsoft-openais-5gw-stargate-supercomputer-feasible/
    Reply