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$100B data centre planned for Microsoft and OpenAI

Written by Thu 4 Apr 2024

Microsoft and OpenAI are partnering on a £78.9 billion ($100 billion) data centre project, planned to be operational in 2028.

Sources from inside OpenAI, including CEO Sam Altman, along with those who have viewed Microsoft cost estimates provided the outline of the data centre strategy to The Information.

It is believed that Microsoft with finance the project, and at least part of the extremely high estimated cost of the data centre is due to the plans to include an artificial intelligence (AI) supercomputer known as ‘Stargate’.

In comparison, cost estimates for large-scale data centre projects run from £5.5 million ($7 million) to £9.4 million ($12 million) per MW of capacity, so a large-scale data centre in a Tier I location could cost anywhere from £331.7 million ($420 million) to £608 million ($770 million) in initial construction. So why would the Microsoft and OpenAI project cost more than 100 times that amount?

A significant amount has been attributed to the AI chips necessary for the AI-enabled data centre. For example, according to CEO Jensen Huang the NVIDIA Blackwell chip is expected to cost more than £23,698 ($30,000) each.

“We had to invent some new technology to make it possible,” said Huang, estimating the company spent £7.8 million ($10 million) in research and development.

Huang added that the cost is not only about the chip, it is also about designing data centres and integrating them into existing data centres to optimise working with the Blackwell chips.

A report emailed from Microsoft to Reuters stated the Microsoft / OpenAI data centre would be designed to work with chips from different suppliers. These could include the NVIDIA Blackwell chips, or the custom-designed AI chips introduced by Microsoft at the Ignite conference last November.

“We are always planning for the next generation of infrastructure innovations needed to continue pushing the frontier of AI capability,” said a Microsoft spokesperson in an email.

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Written by Thu 4 Apr 2024

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