OpenAI is doing a newly-unprecedented, economy-wide infrastructure expansion. Anchoring this milestone is an incredible $500 billion Stargate partnership that they’re pursuing with virtualization star Oracle and investment titan SoftBank. This pledge is already borne fruit in the commissioning of 10 gigawatts worth of facilities throughout the United States. The company is poised to significantly increase its capabilities in artificial intelligence and cloud computing, setting the stage for future innovations.
The Stargate deal, expected to be worth $500 billion, is the second major move by OpenAI to strengthen and scale its distinctive infrastructure. OpenAI has secured a $300 billion cloud partnership with Oracle, underlining the tech giant’s focus on robust computational resources. So does OpenAI CEO Sam Altman, who has said that the company’s upcoming models and products will generate massive demand. That increased demand will drive the need for an even wider-reaching infrastructure.
“You should expect much more from us in the coming months.” – Sam Altman
OpenAI’s determination to make a “very aggressive infrastructure bet” underscores the company’s seriousness and the urgency of its mission in becoming a self-hosted hyperscaler. Each gigawatt of AI data center capacity is $50 billion-$60 billion. This underscores the literal gargantuan investment that will be required in this sector. Infrastructure need Altman stressed that OpenAI needs a huge pipeline of infrastructure. The company is currently seeking agreements to acquire the specialized machinery needed.
The reach of OpenAI’s ambitions go well beyond the U.S. The firm has chosen to launch a joint visible trade initiative, “Stargate UK,” that would bring new data centers to Merrimack Valley or the United Kingdom. OpenAI has done similar infrastructure commitments in other European countries as well, showcasing its worldwide commitment to develop infrastructure.
In an interview on Andreessen Horowitz’s The a16z Podcast, Altman expressed confidence in the company’s research roadmap and the economic value that will emerge from utilizing future models.
“I’ve never been more confident in the research road map in front of us and also the economic value that will come from using those models.” – Sam Altman
OpenAI understands the difficulties that would come with trying to fund such a monumental endeavor. The work is ongoing, and the company is directly pursuing joint ventures to address its equipment requirements. Though it doesn’t have the money today, it’s committed to pursuing every avenue to find a fix.
The urgency of OpenAI’s infrastructure expansion was echoed by Jensen Huang, CEO of NVIDIA, during a discussion on CNBC’s Squawk Box. Huang touched on the growing infrastructure needs within the AI space, which fits right in line with Altman’s plans for OpenAI’s future.
“To make the bet at this scale we kind of need the whole industry, or big chunk of the industry, to support it. And this is from the level of electrons to model distribution and all the stuff in between, which is a lot. So we’re going to partner with a lot a lot of people.” – Sam Altman
OpenAI has set in motion very ambitious plans that will fuel explosive near-term growth. On one hand, they are setting an important precedent with their longstanding leadership in AI and cloud computing. The company expects to announce similar transactions in the next few months. Yet they are fighting very hard to come closer to serving their booming infrastructure demands.
