Microsoft and OpenAI plan $100 billion multi-year investment in a dedicated AI supercomputer datacenter.

Microsoft and OpenAI are collaborating on plans for a data center project that could cost as much as $100 billion, according to reporting by The Information on Friday. The project would include an artificial intelligence supercomputer called "Stargate" set to launch in 2028. Microsoft would likely finance the initiative, which is expected to be 100 times more costly than some of the biggest existing data centers, according to people involved in private conversations about the proposal.

Rapid adoption of generative artificial intelligence technology has driven sky-rocketing demand for AI data centers capable of handling more advanced tasks than traditional data centers. The proposed U.S.-based supercomputer would be the biggest in a series the companies are looking to build over the next six years, The Information reported.

Altman and Microsoft have spread the supercomputers across five phases, with Stargate as the fifth phase. Microsoft is working on a smaller, fourth-phase supercomputer for OpenAI to be launched around 2026. Microsoft and OpenAI are currently in the middle of the third phase of the five-phase plan, with a significant portion of the cost for the next two phases involving acquiring the needed AI chips.

AI chips command high prices in the market. Nvidia CEO Jensen Huang told CNBC in March that the latest "Blackwell" B200 artificial intelligence chip will be priced between $30,000 and $40,000. Microsoft announced a duo of custom-designed computing chips in November last year, and the new project would be designed to work with chips from different suppliers. According to the report, expenses for the plan could exceed $115 billion, more than triple Microsoft's expenditure last year on capital spending for servers, buildings and other equipment.

A Microsoft spokesperson stated in an emailed statement to Reuters: "We are always planning for the next generation of infrastructure innovations needed to continue pushing the frontier of AI capability." The spokesperson did not comment directly on the report about the planned launch of the Stargate supercomputer.