OpenAI, Oracle building Michigan data center

The Stargate Michigan project is expected to cost an initial $16 billion, but Oracle’s Magouyrk said other components will cost even more as artificial intelligence inferencing accelerates.

“It’s going to be an additional $30 billion to $40 billion to put everything inside of it, in terms of the networking, the GPUs, all that kind of stuff,” he said. “Then that stuff obviously gets replaced over time.”

Magouyrk said the cost for infrastructure inside data centers is much more expensive than the buildings that house these tools and have a far shorter lifespan.

— Samantha Subin

Softbank Group announced over the weekend that it will invest $53 billion over the next five years for AI infrastructure in France, part of a larger program to reach 5 GW of data center capacity in the country.

The first phase is for 3.1 GW of AI data center capacity in the northern Hauts-de-France region by 2031, with data centers in Dunkirk, Bosquel and Bouchain, according to a release.

The France buildout marks the company’s largest AI infrastructure investment in Europe and CEO Masayoshi Son told CNBC that he expects AI surge to be magnitudes bigger than the dotcom boom.

“I think this is like more than 10x, probably 50x bigger than dot-com,” he said.

—Chris Eudaily

Related Digital is a subsidiary of a larger real estate firm that has worked on massive projects like the Hudson Yards neighborhood in New York City.

Blau said Related Digital has gone through a “technology learning curve” as it’s built out its data center business, and that the company has brought on “real technology experts to help.”

He said the “fundamentals of execution and development and construction are the same.”

–Ashley Capoot

Asked about growing public backlash to AI data center development, Blau suggested, without evidence, that some of the opposition may be coming from “paid protesters” supported by foreign actors like China.

“I also think, just to be very clear about this, not all the opposition is local,” Blau said. “I mean, we are seeing, and it’s very interesting, that we’re seeing opposition bussed in, effectively, to these data center sites. And it’s not very clear where the capital and the funding and the support for these opposition groups comes from.”

He said the Trump administration is “taking a real look at” whether foreign groups may be assisting with efforts to block data center projects. The White House didn’t immediately respond to a request for comment.

When asked directly if he was suggesting China was part of that pushback, he said, “It could be.”

He added that China could be supporting grassroots opposition efforts as a means of slowing AI development in the U.S.

Rapid construction of AI data centers, which can span hundreds of thousands of square feet, have sparked widespread backlash among many Americans.

A May Gallup poll found that 71 percent of Americans oppose the construction of AI data centers in their community.

They’ve cited concerns about the massive amounts of water and energy required to power and cool such facilities, worsening air quality and noise pollution in surrounding areas, inflated electric bills and whether promises of job creation will materialize.

Cities and counties across the country have recently passed moratoriums to temporarily halt new data center projects and allow for more research into their impacts on communities so that legislators can establish guardrails. Lawmakers have also looked to limit or repeal incentives tied to the projects, or pushed developers to disclose water and energy usage at the sites.

— Annie Palmer

Blau said Related expects to deliver Stargate Michigan at the end of 2027 and to “start seeing cash flow immediately after that.”

“High-rise buildings, as you know, take three or four years, so this is actually much faster,” he said. “It’s got a great return profile for us and our investors.”

The massive real estate firm is widely known for developing New York’s Hudson Yards and has a stake in Equinox fitness clubs.

— Samantha Subin

As OpenAI, Oracle and other tech companies have committed to pouring billions of dollars into data center buildouts, they’ve faced fierce pushback from many local communities across the U.S.

At least $156 billion in data center projects were blocked or delayed amid local opposition and litigation last year, according to a report from Data Center Watch. 

The Stargate project in Michigan faced substantial opposition. The board in Saline Township initially voted four to one against the data center project. Related Digital sued the township, and the project moved forward after the case was settled.

“This is where Related uses its decades of experience in working with communities and kind of building responsibly,” Blau said.

Blau acknowledged that communities are concerned about data centers taking local water supply, but said Stargate will use a “closed-loop cooling system” that will use less water than farmers.

“We are preserving open space,” he said. “So we’re on a site of almost 700 acres, more than half of that is being preserved forever as farmland, and so there’s, there’s lots of ways we are making contributions to the fire department and the rec center here.”

–Ashley Capoot

Blau said the company is building the infrastructure that will underpin the sprawling Stargate Michigan datacenter project.

That includes power substations, data halls and power cooling, chips and racks, he said.

“Oracle will take it from there, and they will invest substantial dollars past our $16 billion,” he said

— Samantha Subin

The Stargate site in Michigan was announced late last year, and Related Digital said in a release that it will be developed on 250 acres of land in Saline Township, which is located southwest of Ann Arbor in Washtenaw County.

The project consists of three 550,000 square foot single-story buildings, and was dubbed “The Barn” because of the red barn that marks the entrance to the site.

—Ashley Capoot