OpenAI's Massive $11.6 Billion Data Center Project Signals Shift in AI Infrastructure

OpenAI's biggest data center secures $11.6 billion in funding, WSJ reports

May 21 (Reuters) - A data center in Texas that startup Crusoe is building for OpenAI has secured $11.6 billion in funding to expand from two to eight buildings, the Wall Street Journal reported on Wednesday. The data center -- expected to be the ChatGPT parent's largest -- will use up to 50,000 Nvidia (NVDA.O), opens new tab Blackwell chips per building, according to the report. The funding, a mix of debt and equity, will increase the total amount secured for the project to $15 billion, the WSJ report said, citing Crusoe. The development of these data centers is a crucial step for OpenAI as it looks to expand key infrastructure necessary for tackling complex tasks employed by generative artificial intelligence, while reducing dependence on its backer Microsoft (MSFT.O), opens new tab. OpenAI, Nvidia and Crusoe did not immediately respond to Reuters' requests for comment. Crusoe, launched in 2018 as a cryptocurrency business, has pivoted to building AI infrastructure and is among the upcoming "neoclouds" that provide specialized AI cloud and data center services. The startup was tapped by Oracle to build the first data center for the $500 billion Stargate project, Reuters had reported in January. Crusoe is building its own data center in Abilene, Texas that will hold 100,000 specialized AI chips per building and is set to come online this year. Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Technology

Startup Crusoe Nets $11.6B In Fresh Financing For Massive New OpenAI Data Center

Crusoe Energy Systems, a Denver-based startup that builds data centers, has secured $11.6 billion in new debt and equity funding commitments for a massive new facility it's building for AI giant OpenAI in Texas, The Wall Street Journal reported. The eight-building data center is expected to be the largest used by OpenAI and one of the largest AI datacenters in the world. It is considered to be the first phase of The Stargate Project, an ambitious $500 billion AI joint venture created by OpenAI, SoftBank, Oracle and MGX to build new AI infrastructure in the U.S. Crusoe and investment firm Blue Owl Capital are both contributing cash as part of the latest financing for the facility, per the Journal. Crusoe began construction on the facility in Abilene last June after striking a deal with cloud infrastructure giant Oracle to lease it. OpenAI in turn agreed to rent servers from Oracle. Crusoe has raised $1.6 billion in funding to date, according to Crunchbase data. The startup has received backing from venture firms Founders Fund, G2 Venture Partners and Bain Capital Ventures, among others. While the company has continued to attract funding from major backers, energy-related startup funding overall has not scaled up with the AI sector's appetite for power. In 2024, global investment in energy startups actually hit its lowest point in four years, Crunchbase data shows. OpenAI has raised $58 billion in funding to date. The San Francisco-based startup raised $40 billion in a SoftBank-led round in April, marking the largest venture funding deal on record. It's now valued at $300 billion, making it the second-most valuable private company in the world behind SpaceX.

Sam Altman's OpenAI Raises $11.6 Billion For Texas Data Center As It Moves To Reduce Reliance On Microsoft: Report - Microsoft (NASDAQ:MSFT), NVIDIA (NASDAQ:NVDA)

OpenAI's Texas-based data center has reportedly secured an additional $11.6 billion in funding. What Happened: The funding, a combination of debt and equity, would be used to expand the data center from two to eight buildings. According to Crusoe, this will bring the project's total funding to $15 billion. Both Crusoe and the investment firm Blue Owl Capital are participating in the latest funding round, according to a report by The Wall Street Journal on Wednesday. Set to be completed next year, the data center will be OpenAI's largest, housing up to 50,000 Nvidia NVDA Blackwell chips per building for training large language models. The development of this site in the city of Abilene is a crucial step in minimizing OpenAI's reliance on Microsoft Corp. MSFT. OpenAI had previously relied exclusively on Microsoft for its computing power. However, last spring, OpenAI struck a deal with Oracle ORCL to use the Abilene site after Microsoft gave its approval. OpenAI did not immediately respond to Benzinga's request for comment. SEE ALSO: Mr Wonderful Kevin O'Leary Says Elizabeth Warren Taking An 'Un American' Position By Challenging Crypto Law: 'Bill Has Nothing To Do With Trump' Get StartedEarn 7.2% -- No Matter What the Fed Does Markets expect rate cuts -- but your earnings don't have to suffer. Lock in 7.2% until 2028 from ten individual bonds. Get Started Why It Matters: This development comes in the wake of OpenAI's ongoing efforts to reduce its dependence on Microsoft. Earlier this month, OpenAI had plans to cut the share of revenue it pays to Microsoft by at least half by the end of the decade. Moreover, another report suggested that the ChatGPT-maker was in high-stakes negotiations with Microsoft to revise the terms of their multibillion-dollar partnership, with a key point of contention being the equity Microsoft would receive in the restructured OpenAI entity. OpenAI plans to develop its own data center network as part of a long-term strategy. Earlier this year, CEO Sam Altman also announced a $500 billion infrastructure project called Stargate, in partnership with SoftBank and Oracle. The new funding and expansion of the Texas data center signify a critical step in OpenAI's strategic move towards self-reliance and its ambitious long-term infrastructure project, Stargate. READ MORE: 'A Completely Man-Made Crisis' -- Fox News Host Comments On Walmart's Price Hikes Due To Trump's Tariffs Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. MSFTMicrosoft Corp$456.17-0.44%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum71.86Growth52.03Quality32.53Value13.66Price TrendShortMediumLongOverviewNVDANVIDIA Corp$133.19-0.89%ORCLOracle Corp$158.70-1.00%Market News and Data brought to you by Benzinga APIs

OpenAI Texas Data Center Lands $11.6 Billion in Funding Commitments | PYMNTS.com

The center, set to become the ChatGPT maker's largest, is being constructed in the Texas community of Abilene by the startup Crusoe and is critical to boosting OpenAI's computing power, the Wall Street Journal (WSJ) reported Wednesday (May 21). Crusoe told the news outlet that the funding, a mix of debt and equity, will expand the data center to eight buildings from two and bring the amount secured for the project to $15 billion. The data center is slated for completion next year. Each building will run up to 50,000 Nvidia Blackwell chips, typically used for training large language models. As the WSJ noted, the development of this site is critical to reducing OpenAI's dependence on Microsoft in the race to build the next generation of artificial intelligence (AI) models. Eventually, the report added, OpenAI hopes to construct and operate its own data centers. Earlier this year, the company teamed with Japanese tech investor SoftBank and cloud provider Oracle on "Stargate," an AI infrastructure project with a $500 billion price tag. In other AI news, PYMNTS wrote earlier this week on new research that shows the limits of AI agents. This study evaluated how these agents performed in a simulated work environment and found that even the most advanced systems can only complete a handful of tasks. "They get stumped by tasks that are easy for humans, such as closing a pop-up window or waiting 10 minutes before escalating an issue," that report said. Researchers from Carnegie Mellon University and other institutions created a software company staffed by 17 AI agents who interacted with AI agents from popular AI models such as OpenAI's GPT-4o and Anthropic's Claude 3.5 Sonnet. The researchers then evaluated how well the AI models performed on tasks in fields like software engineering, project management, finance and HR. The conclusion? While AI agents can improve the productivity of workers, "they're not ready to replace real-world human jobs," study co-author Boxuan Li told PYMNTS. The results stand in contrast to the vast amounts of money being invested in AI agents by companies looking to tap into the promise of smart automation. "So much money is going to the agent area," noted co-author Yufan Song in an interview with PYMNTS. Agents "can help speed up our productivity, but to replace humans, I think, still needs some time."