Microsoft and OpenAI Project Stargate - Wyatt Investment Research

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