GAIA will obtain, in a five-year mission, astrometric, photometric and spectroscopic data for more than a billion stars. The treatment of this huge amount of data is a challenge for the astronomical community, not only due to the database size, but also to the complex relationships existing between the different sets of data and with the instrumental and orbital parameters. The GAIA Data Analysis Study (GDAAS), under ESA's contract, aims to prove the feasibility of the data reduction scheme and to implement and test a prototype of such a large database. We present the main aspects that GDAAS addresses and review its present status.