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Stargate Project: SoftBank, OpenAI, Oracle, MGX to build data centers

1021 pointsby tedsanders01/21/20251538 commentsview on HN

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dhx01/22/2025

It was rumoured in early 2024 that "Stargate" was planned to require 5GW data centre capacity[1][2] which in early 2024 was the entire data centre capacity Microsoft had already built[3]. Data centre capacity costs between USD$9-15m/MW[6] so 5GW of new data centre capacity would cost USD$45b-$75b but let's pick a more median cost of USD12m/MW[6] to arrive at USD$60b for 5GW of new data centre capacity.

This 5GW data centre capacity very roughly equates to 350000x NVIDIA DGX B200 (with 14.3kW maximum power consumption[4] and USD$500k price tag[5]) which if NVIDIA were selected would result in a very approximate total procurement of USD$175b from NVIDIA.

On top of the empty data centres and DGX B200's and in the remaining (potential) USD$265b we have to add:

* Networking equipment / fibre network builds between data centres.

* Engineering / software development / research and development across 4 years to design, build and be able to use the newly built infrastructure. This was estimated in mid 2024 to cost OpenAI US$1.5b/yr for retaining 1500 employees, or USD$1m/yr/employee[7]. Obviously this is a fraction of the total workforce needed to design and build out all the additional infrastructure that Microsoft, Oracle, etc would have to deliver.

* Electricity supply costs for current/initial operation. As an aside, these costs seemingly not be competitive with other global competitors if the USA decides to avoid the cheapest method of generation (renewables) and instead prefer the more expensive generation methods (nuclear, fossil fuels). It is however worth noting that China currently has ~80% of solar PV module manufacturing capacity and ~95% of wafer manufacturing capacity.[10]

* Costs for obtaining training data.

* Obsolescence management (4 years is a long time after which equipment will likely need to be completely replaced due to obsolescence).

* Any other current and ongoing costs of Microsoft, Oracle and OpenAI that they'll likely roll into the total announced amount to make it sound more impressive. As an example this could include R&D and sustainment costs in corporate ICT infrastructure and shared services such as authentication and security monitoring systems.

The question we can then turn to is whether this rate of spend can actually be achieved in 4 years?

Microsoft is planning to spend USD$80bn building data centres in 2025[7] with 1.5GW of new capacity to be added in the first six months of 2025[3]. This USD$80bn planned spend is for more than "Stargate" and would include all their other business units that require data centres to be built, so the total required spend of USD$45b-$75b to add 5GW data centre capacity is unlikely to be achieved quickly by Microsoft alone, hence the apparent reason for Oracle's involvement. However, Oracle are only planning a US$10b capital expenditure in 2025 equating to ~0.8GW capacity expansion[9]. The data centre builds will be schedule critical for the "Stargate" project because equipment can't be installed and turned on and large models trained (a lengthy activity) until data centres exist. And data centre builds are heavily dependent on electricity generation and transmission expansion which is slow to expand.

[1] https://news.ycombinator.com/item?id=39869158

[2] https://www.datacenterdynamics.com/en/news/microsoft-openai-...

[3] https://www.datacenterdynamics.com/en/news/microsoft-to-doub...

[4] https://resources.nvidia.com/en-us-dgx-systems/dgx-b200-data...

[5] https://wccftech.com/nvidia-blackwell-dgx-b200-price-half-a-...

[6] https://www.cushmanwakefield.com/en/united-states/insights/d...

[7] https://blogs.microsoft.com/on-the-issues/2025/01/03/the-gol...

[8] https://www.datacenterdynamics.com/en/news/openai-training-a...

[9] https://www.crn.com.au/news/oracle-q3-2024-ellison-says-ai-i...

[10] https://www.iea.org/reports/advancing-clean-technology-manuf...

nbzso01/23/2025

How is my memecoin going? Several billions, sir. Hahahahahaha

tibbydudeza01/21/2025

Oracle is onboard - guess you got to toss them some red meat as well.

mystified501601/21/2025

You'd really think that arguably the leader in generative AI could come up with a unique project name instead of ripping off something extant and irrelevant.

But then again that's their entire business, so I shouldn't be too surprised.

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anonzzzies01/22/2025

Is this Ellison's attempt to become #1 richest again?

dartos01/21/2025

The fallout is going to be insane when the AI bubble pops.

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MaximilianEmel01/22/2025

How much is allocated to alignment/safety research?

tantalor01/22/2025

Wasn't this already announced last week?

eichi01/23/2025

Elison is a only self-made man I prefer

gsky01/21/2025

I guess its the right time to buy AI stocks

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chvid01/22/2025

Comment from Elon Musk:

https://x.com/elonmusk/status/1881923570458304780

They don’t actually have the money

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karmasimida01/22/2025

Money isn't the issue any more, wowww

PeakKS01/22/2025

They are clearly building GW from MGS2

skellington01/22/2025

I'm not automatically pro or anti Stargate (the movie and show were cool) BUT

Who gets the benefit of all of this investment? Are taxpayers going to fund this thing which is monetized by OpenAI?

If we pay for this shit, it better be fucking free to use.

bfrog01/21/2025

So tsmc and nvidia basically then?

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pyrophoenix01/21/2025

More confusion than anything else!

b3ing01/22/2025

100,000 US jobs that I bet most are h-1b workers and they go over the 80,000 limit there were over 220,000 issued in 2023

aurareturn01/22/2025

Feels so much like an announcement designed to trade favors.

Altman gets on Trump's good side by giving him credit for the deal.

Trump revoked Biden's AI regulations.

Deutschland31401/22/2025

Why oracle?

Oracle wtf.

senectus101/21/2025

I watched the announcement live, I could have sworn that the softbank guy said "initial investment of 100 MILLION, we hope to EARN 500 BILLION by the end of your (Trumps) term"

Gave me a real "this is just smoke and mirrors hiding the fact that the white house is now a glory hole for Trump to enjoy" feel.

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demizer01/22/2025

Hopefully they discover AGI and the AGI turns out to be a communist. They will kill it SO fast.

thingsilearned01/21/2025

Stargate = Skynet?

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heyitssim01/22/2025

who will benefit from those datacenters?

smeeger01/22/2025

artificial intelligence must be stopped

TheOtherHobbes01/21/2025

SoftBank, huh?

That's... not a good omen.

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slt202101/22/2025

too late, China is already ahead

yobid2001/22/2025

Oh but crypto mining was bad lol wheres the power going to come from

attentive01/21/2025

what will they call the SG-1?

baobun01/22/2025

Larry Elliot, Elon Musk, and Masayoshi Son.

They really got together the supervillains of tech.

Feels like the the only reason Zuck is missing is Elon's veto.

MiscIdeaMaker9901/21/2025

I can't stop rolling my eyes at all those big promises.

x-00701/22/2025

money smells good i think

Giorgi01/22/2025

Oh so that's why Pelosi invested in Micro nuke electricity plants.

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dpflan01/22/2025

Last time, in 2016, SoftBank announced a $50B investment in the US...what were the results of that? Granted, SB announced an up-selled $100B investment earlier, is this not similar in "announcement"?

""" SoftBank’s CEO Masayoshi Son has previously made large-scale investment commitments in the US off the back of Trump winning a presidential election. In 2016, Son announced a $50 billion SoftBank investment in the US, alongside a similar pledge to create 50,000 jobs in the country.

...

However, as reported by Reuters, it’s unclear if the new jobs pledged back in 2016 ever came to fruition and questions have been raised about how SoftBank, which had $29 billion in cash on its balance sheet according to its September earnings report, might fund the investment. """

- https://www.datacenterdynamics.com/en/news/softbank-pledges-...

padjo01/21/2025

Watch the birdie

nmca01/21/2025

I for one am hugely supportive of compute that is red white and blue.

mupuff123401/21/2025

It's just more hype and PR antics from sama.

gigel8201/21/2025

I dislike associating a great fictional universe (Stargate series) with this disgusting affair...

bayeslaw01/22/2025

Altman said we will be amazed at the rate AI will CURE diseases. Not diagnose, not triage or help doctors but cure, ie understand at a deep fundamental, mechanistic level then devise therapies, ie drugs, combination of drugs and care practices that work. WOW.

Despite the fact that this is THE thing I'd be the happiest to see in the real world (having spent a considerable amount of my career in companies working towards this vision), we are so far from it (as anyone who actually worked on these problems will attest) that Altman's comment here isn't just overselling, it's a blatant lie about this tech's capabilities.

I guess the pitch was something like: "hey o3 can already do PhD level maths so you know in 5 years it will be able to do drugs too, and cure shit, Mr President".

Trouble is o3 can't do advanced math (or at least definitely not at the level openai claimed.. it was a lie, it turns out openai funds the dataset that measures this - ouch). And the bigger problem is, going from "ai can do maths" to "invent cures" is about a 10-100 X jump. If it wasn't, don't we think the pharma companies would have solved this by hiring lots of "really smart math guys"?

As anyone in biotech will tell you, the hard bit is not the first third of the drug discovery pipeline (where 99% of ai driven biotechs focus). It's the later parts where the rubber meets the road.. i.e. where your precious little molecule is out in the real world with real people where the incredible variability of real biological hosts makes most drugs fail spectacularly. You can't GPT your way out of this. The answers for this is not in science papers that you can just read and regurgitate a version that "solves biology and cures diseases".

To solve this you need AI but most of all you have to do science. Real science. In the lab, in vitro and in Vivo, not just in silico, doing ablation studies, overfitting famous benchmark datasets and other pseudo science shit the ML community is used to doing.

That is all to say, I'd bet we won't see a single purely AI designed novel drug in the clinic in this decade. All parts of that sentence are important. Purely AI designed. Novel. But that's for another post..

Now, back to Altman. If you watch the clip, he almost did the smart thing at first when Trump put him on the spot and said "I have no idea about healthcare, biotech (or AI beyond board room drama)" but then could not resist coming up with this outlandish insane answer.

Famously (in tech circles anyway) Paul Graham wrote more than a decade ago about Altman that he's the most strong willed individual he's ever met, who can just bend the universe to his will. That's his super skill. And clearly.. convincing SoftBank and Oracle to do this 500 billion investment for OpenAI (a non profit turned for profit) is an unbelievable achievement. I have no idea what Altman can say (or do) in board rooms that unlocks these possibilities for him.. Any ideas? Let me know!

jofzar01/21/2025

> This project will not only support the re-industrialization of the United States but also provide a strategic capability to protect the national security of America and its allies.

> The initial equity funders in Stargate are SoftBank, OpenAI, Oracle, and MGX. SoftBank and OpenAI are the lead partners for Stargate, with SoftBank having financial responsibility and OpenAI having operational responsibility. Masayoshi Son will be the chairman.

I'm sorry, has SoftBank suddenly become an American company? I feel like I'm taking crazy pills reading this.

Edit: MGX is Saudi company? This is baffling....

https://www.mgx.ae/en

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ensocode01/22/2025

Why now? Is this to compensate the campaign donors or to scare Putin?

JSTrading01/22/2025

Wasn’t this announced months ago? I feel like it was. https://www.techradar.com/pro/could-amd-be-the-key-to-micros...

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tasuki01/21/2025

> Masayoshi Son will be the chairman.

Not all rich people are out of their minds, but Masayoshi Son definitely is. The way he handled the WeWork situation was bad...

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newfocogi01/21/2025

> "OpenAI will continue to increase its consumption of Azure as OpenAI continues its work with Microsoft"

Not sure why, but the word choice of "consumption" feels like a reverse Freudian slip to me.

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barbazoo01/21/2025

> This project will [...] support the re-industrialization of the United States

How?

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jklinger41001/21/2025

> starting in Texas

Maybe I just don't get it. Texas seems like an awful place to do business.

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bugdout01/22/2025

[dead]

gffff01/22/2025

[dead]

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