Tech giant Microsoft (NASDAQ:MSFT) and OpenAI are teaming up for an enormous $100 billion data center venture, The Information reported. Central to this initiative is developing a supercomputer named “Stargate,” which will likely strengthen MSFT and OpenAI’s leadership in the artificial intelligence (AI) space.
Stargate will accommodate millions of specialized server chips and bolster OpenAI’s AI capabilities. Meanwhile, Microsoft, a significant investor in OpenAI, is likely to fund this project. Per the report, MSFT is developing a smaller, phase 4 supercomputer for OpenAI, expected to be launched around 2026. Meanwhile, these companies expect to launch Stargate by 2028.
It’s worth noting that Stargate will be able to leverage GPUs from various suppliers, including Microsoft’s in-house server chips. This strategic move aims to give Microsoft and OpenAI a competitive edge in AI computing and will likely lower their dependency on Nvidia’s (NASDAQ:NVDA) chips.
What is the Prediction for Microsoft Stock?
Microsoft stock has gained about 48% in one year. This growth came on the back of its efforts to strengthen its AI capabilities and integrate the technology into its product offerings.
Wall Street is bullish about MSFT’s prospects. Microsoft stock has 31 Buy, one Hold, and one Sell recommendations, translating into a Strong Buy consensus rating. Analysts’ average price target on MSFT stock is $468.86, implying 11.44% upside potential from current levels.
