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...