Stargate Project Pivots: OpenAI Abandons Construction for Leasing, Wakes from 1.4 Trillion Compute Empire Dream
OpenAI has significantly restructured its ambitious Stargate project, shifting from a plan to build its own data centers to leasing computing power from cloud providers like Microsoft Azure, Oracle, and Amazon AWS. Initially announced in January 2025 with a projected investment of up to $1.4 trillion, the project's budget has been reduced by 57% to around $600 billion through 2030.
The change comes after more than a year of delays, with no employees hired and no construction started, largely due to lenders' reluctance to finance the project given OpenAI’s ongoing substantial operating losses. The restructured Stargate is now organized into three teams overseeing commercial partnerships, technical engineering, and physical operations, all managed by former Intel executive Sachin Katti.
Despite the shift in strategy, OpenAI still aims to deploy nearly 7 gigawatts of server capacity over three years, with investments totaling over $400 billion. The company is also developing its own AI chips in collaboration with Broadcom to reduce inference costs. Annual spending is projected to reach about $120 billion, matching Microsoft's yearly capital expenditure, even as OpenAI's revenue remains significantly lower and profitability is not expected before 2030.
marsbit03/17 13:08
