OpenAI, Oracle are planning 1GW Stargate data center in Michigan
What's the story
OpenAI, Oracle, and Related Digital have announced plans to construct a massive 1 gigawatt (GW) data center campus in Saline Township, Michigan. The project is part of the companies' larger 4.5GW Stargate expansion plan, aimed at bolstering artificial intelligence (AI) infrastructure capacity in the US. When combined with six other planned sites across the US, it will increase the infrastructure group's total capacity to over 8GW and its total investment to more than $450 billion over three years.
Scenario
Construction set to begin in early 2026
The data center campus development is scheduled to begin in early 2026. The facility will be constructed by Related Digital and is expected to create over 2,500 union construction jobs. The companies described the project as a multi-billion-dollar investment but did not reveal the exact amount. Industry executives estimate that 1GW of computing power, enough to power about 750,000 US homes, could cost roughly $50 billion.
Commitment
Stargate project ahead of schedule
The construction of this data center campus puts OpenAI's Stargate project ahead of schedule in meeting its ambitious $500 billion, 10GW commitment. The company has not provided much detail on how it plans to finance this expenditure. Earlier this week, it completed a restructuring that allows the ChatGPT maker to move away from its nonprofit roots and possibly prepare for an IPO that could value the company at up to $1 trillion.
Market concerns
AI boom raises bubble concerns
The skyrocketing valuations of AI companies and their massive spending commitments, exceeding $1 trillion for OpenAI alone, have sparked fears that the AI boom is turning into a bubble. Despite these concerns, Peter Hoeschele, OpenAI's VP of industrial compute, said this project will ensure Michigan plays a key role in building the necessary infrastructure for future American innovation.