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 want to become self-sufficient and satisfy their own computational needs.
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What you need to know
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 asthe 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 whereNVIDIA can’t meet or satisfy the alarmingly high demand for AI chipsas 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 (viaThe 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?
While Microsoft and OpenAI haven’t confirmed the claims, a Microsoft Spokesman disclosed the company’s heavy investment and future with AI when speaking toBusiness Insiderby indicating:
“We are always planning for the next generation of infrastructure innovations needed to continue pushing the frontier of AI capability.”
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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 byThe 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 indicatethere won’t be enough electricity to power AI advances soon. Reaching such heights in computing will require more power.
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.
