OpenAI plans to spend over $30B on 3.2 GW Georgia data center

OpenAI (OPENAI) plans to spend over $30B on a new 3.2-gigawatt data center near Savannah, Georgia.

The ChatGPT maker has contracted with Georgia Power and secured 3.2 GW of energy for the data center complex in Effingham County, potentially setting the facility up to rank among the company's largest to date, Bloomberg News reported.

OpenAI did not immediately respond to Seeking Alpha's request for comment.

Several hundred megawatts are expected to come online starting in 2028, with the rest of the development extending through 2032, the report noted.

OpenAI pledged to spend $20B in the county in order to qualify for an incentive package that will be voted on this week, according to the company. At the full 3.2 GW size of the project, the cost would probably be over $30B, said Sachin Katti, vice president of compute strategy at OpenAI.

Katti said OpenAI is currently seeking partners to help finance and develop the data center and may opt to do some of the operation itself, the report added.

OpenAI said it will pay the full cost of electrical infrastructure and power to serve the Georgia data centers, adding that state rules prohibit passing costs to existing customers. The company also noted that its new facility is designed to proactively cut power use when there is high demand to avoid affecting nearby residents. The data center will also use a “closed-loop” cooling system that circulates the same water to reduce use, the report noted.

In addition, OpenAI said that it will pay hundreds of millions of dollars in state and local taxes, alongside plans to set up a community fund and offer credits for local students to use its AI services.

Chris Lehane, the company's chief global affairs officer, said that while OpenAI has already met with county officials, it will start discussions with residents on Thursday to hear any concerns that are not addressed in the current plan. Lehane added that OpenAI plans to conduct an independent audit to make sure it’s complying with its commitments.

"All issues are going to be local,” said Lehane. "It’s really important to understand it's not always going to be a cookie-cutter approach."

Several projects are now running into local opposition, as communities and political leaders raise concerns about the impact of data centers on utility prices and the environment. Last week, New York became the first U.S. state to ‌halt construction of large new data centers, imposing a one-year moratorium as concerns that the facilities driving the AI boom are raising power costs and straining water supplies.

Last year, OpenAI's CEO Sam Altman said he expects the company to spend trillions of dollars on physical infrastructure to support its long-term AI ambitions. The AI giant has collaborated with developers on large data centers in Europe, the Middle East, and several U.S. states as part of its Stargate initiative.

OpenAI's approach to Stargate has changed, as well. Originally conceived as a joint venture with Oracle (ORCL) and SoftBank Group, Stargate projects have since featured different combinations of partners, the report added.