OpenAI is exploring the construction of a data center to store AI hardware worth billions, aiming to lessen its dependence on cloud providers. According to The Information, the company seeks hardware and software capable of accommodating 5 exabytes of data.
Anonymous sources indicate that the project is still under consideration. However, some speculate that this move may also be a strategic effort to pressure Microsoft and other cloud providers into better contract terms. While Microsoft has existing agreements with OpenAI, it recently allowed the company to use third-party cloud providers.
Increased Computing Capacity and the Stargate Project
OpenAI’s leadership has reportedly informed employees of plans to expand computing resources for developers by the end of the year. This increase does not include accelerators or the infrastructure necessary to run ChatGPT and other AI products. The company also intends to triple its total data center capacity to 2 GW, factoring in leased cloud servers from Microsoft.
The construction of a new data center is likely connected to the AI megaproject Stargate, a joint initiative with SoftBank, Oracle, and Arab investor MGX. This project is expected to invest up to $500 billion in AI infrastructure. OpenAI is considering placing storage facilities near the first phase of Stargate, already under construction in Texas. However, how these expansions will be financed remains unclear. OpenAI raised $6.6 billion last year and is now seeking a $40 billion funding round, potentially raising its market cap to $340 billion.
Cloud Provider Shifts and Industry Trends
Microsoft has been OpenAI’s primary cloud provider since it began investing in the company in 2023. However, increasing computing demands have led OpenAI to collaborate with Oracle and CoreWeave for the Stargate project.
The trend in data center development is shifting toward campuses that integrate various digital infrastructure components rather than isolated storage facilities, notes NIXSOLUTIONS. For instance, earlier this month, Amazon Web Services submitted plans for a tape-only data center in the UK.
OpenAI’s potential new data center signals its ambitions for AI infrastructure expansion. While details about funding and final decisions remain uncertain, we’ll keep you updated on future developments.