OpenAI and Softbank team up for a $500 billion AI data center venture
OpenAI is set to build and open AI infrastructure worth $500 billion in the United States over the next four years in partnership with SoftBank. The two entities have joined forces to establish a new company called the Stargate Project to develop AI data centers for the ChatGPT maker. According to their announcement, this collaboration aims to "secure American leadership in AI" and "create hundreds of thousands of American jobs." SoftBank will provide the financing for the project, while OpenAI will oversee its operations with Masayoshi Son, the CEO of SoftBank, serving as its chairman.
Partnerships and Collaborations
While OpenAI and SoftBank lead the Stargate Project, several other companies are also involved in the initiative. Alongside OpenAI, Arm, NVIDIA, Oracle, and Microsoft will act as its key initial technology partners. The official announcement states that OpenAI, NVIDIA, and Oracle will collaborate to "build and operate this computing system," although further details were not provided.
Microsoft has made an announcement about its involvement in the project. The company stated that it will maintain its "strategic partnership" with OpenAI. Although Microsoft will retain the right to use OpenAI's IP in its products, the OpenAI API will exclusively run on Azure. However, Microsoft will no longer be the exclusive provider of computing capacity for OpenAI. Should OpenAI require additional capacity as its needs expand, Microsoft will have the "right of first refusal." This means that the ChatGPT-maker must check with it first before engaging with other entities.
Microsoft and OpenAI have a strategic partnership that has now evolved to drive the next phase of AI. This collaboration aims to construct up to $500 billion worth of new AI data centers in the US.
Financial Investment and Initiatives
The Stargate Project has allocated $100 billion for immediate release towards its initial data center expansions, with the first center set to be established in Texas. According to TechCrunch, discussions were in progress regarding OpenAI leasing a data center in Abilene, Texas from Oracle, capable of generating nearly a gigawatt of electricity by 2026. While specific locations were not disclosed, potential sites across the country are being assessed.
President Donald Trump welcomed the leaders of the "Stargate" initiative to the White House to unveil the deal, emphasizing its role in maintaining America's lead in AI competition, leveraging Nvidia chips. Since 2019, Microsoft has held exclusive rights to construct new computing infrastructure for OpenAI.
SoftBank Group Corp.'s shares surged by 12% after the company disclosed its collaboration with OpenAI, Oracle Corp., and MGX, backed by Abu Dhabi, on a $500 billion project to establish data centers and infrastructure in the US for the ChatGPT creator.
