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Michigan OpenAI-Oracle data center project reportedly grew from $7B to $16B

A user claims the project needed $9 billion more than at its start and says rising equipment costs and milestone-based funding payouts are creating shortfalls across data center builds.

RogerRO
1 Source, 12d ago, first seen 12d ago

TLDR

A user claims a Michigan OpenAI-Oracle data center project grew from $7 billion to $16 billion, with further increases expected. They say generator and electrical-equipment costs rose as much as 400% in a year, while funding shortfalls have forced some project sponsors to seek other financing or abandon builds midway. The user also claims chip costs for the Michigan project had risen by an extra $40 billion as of June.

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10.4K

1 Source, first seen 12d ago

296 likes12 comments50 saves64 reposts

Combined views

10.4K

1 Source, first seen 12d ago

296 likes12 comments50 saves64 reposts

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1 Source

Roger@rdd147Hearing of big news that’s about to drop on data centers soon… Recent risk management strategies placed on data centers to now require milestone funding payouts are causing massive shortfalls on projects as inflation is pushing up costs far faster than expected. Generators and electrical equipment have risen as much as 400% in a year, steel and concrete up. Debt sponsors are now having to abandon projects at their midpoint or find alternative financing for the shortfall until the next tranche can be released. Many data centers are seeing this happen, including an OpenAi $ORCL project in Michigan that already required an additional $9 billion from the project start date, ballooning from $7 billion to $16 billion with more increases expected. The chip costs ballooned to an extra $40 billion as of June for the data center. It’s gotten far worse for Oracle and many other datacenters like $META and Neocloud/SPVS.12d
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    1 Source

    Roger@rdd147Hearing of big news that’s about to drop on data centers soon… Recent risk management strategies placed on data centers to now require milestone funding payouts are causing massive shortfalls on projects as inflation is pushing up costs far faster than expected. Generators and electrical equipment have risen as much as 400% in a year, steel and concrete up. Debt sponsors are now having to abandon projects at their midpoint or find alternative financing for the shortfall until the next tranche can be released. Many data centers are seeing this happen, including an OpenAi $ORCL project in Michigan that already required an additional $9 billion from the project start date, ballooning from $7 billion to $16 billion with more increases expected. The chip costs ballooned to an extra $40 billion as of June for the data center. It’s gotten far worse for Oracle and many other datacenters like $META and Neocloud/SPVS.12d
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