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.

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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.