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Project Stargate.
It’s an ambitious plan to invest over $100 billion to create an AI supercomputing system.
This new AI initiative is the latest from Microsoft (NASDAQ: MSFT) and OpenAI (private).
Project Stargate could be a series of interconnected AI datacenters. Working together these would create a supercomputer cluster.
Microsoft is already getting started on Project Stargate in Wisconsin.
The company bought a 315-acre pumpkin farm outside of Milwaukee.
It’s spending $1 billion to build a state-of-the-art AI datacenter.
The total cost will be +$10 billion once it’s outfitted with Nvidia chips.
This new AI datacenter is expected to open within 2-years. It will be used to support OpenAI’s GPT-5.
OpenAI and Microsoft plan to build a network of similar AI datacenters in San Jose, San Antonio, Virginia and Brazil.
The proposed $100 billion investment in Stargate is a ton of money – even for Microsoft.
It’s 3x larger than Microsoft’s entire capital spending last year.
Microsoft ended last year with $81 billion in cash.
Here’s the key takeaway…
Tech giants including Microsoft must invest hundreds of billions to build AI infrastructure.
This means building new datacenters – like the one in Wisconsin.
It also means re-fitting existing datacenters with new AI chips from Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD).
This will also create a surge in demand for cooling technologies… cyber security solutions… and even electricity.
It still the early days for this AI transformation.
Ian