Microsoft and OpenAI Plan $115 Billion Investment in New AI Supercomputer Stargate, Potentially Benefiting Chip Designer Arm
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Microsoft and OpenAI are planning to invest up to $115 billion in a powerful new AI supercomputer called Stargate by 2028.
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The supercomputer could be 100x more expensive than current data centers and aims to power advanced generative AI models.
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Microsoft recently launched its first custom AI processor, Azure Cobalt, based on Arm's technology to potentially power Stargate.
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Increased demand from Microsoft's AI investment could benefit Arm Holdings, which licenses chip designs and gets royalties from Arm-based chips.
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Analysts estimate 45% annual earnings growth for Arm in the next 5 years, which could reach $208 per share and significantly outperform if Microsoft demand rises.