OpenAI’s Sam Altman Wants to Build a Global Network of Chip Fabrication Plants

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OpenAI’s Sam Altman, who was working to raise billions of dollars in new investments late last year before an internal revolt resulted in his brief departure and an equally dramatic restoration at the helm of one of the world’s leading artificial intelligence companies, has reportedly upped the ante and is now seeking to build a vast network of chip fabrication plants.

Back in November 2023, reports emerged that Sam Altman was trying to raise funds in the Middle East for a new venture that would, in due course, aim to subvert NVIDIA’s dominance in the field of AI chips. The venture, once realized, would not only provide a low-cost alternative to NVIDIA but also substantially reduce OpenAI’s chip acquisition costs.

Today, Bloomberg has added color to these previous reports by reporting that Sam Altman is now specifically aiming to establish a network of dedicated fab units by seeking the requisite mammoth funding from global investors, including Abu Dhabi’s G42 and Japan’s SoftBank.

According to Bloomberg, Altman is trying to rope in “top chip manufacturers” for this purpose, presumably referring to TSMC and Samsung. Nonetheless, these talks are still at an early stage, and, therefore, many of the details remain hazy.

Do note that the construction of state-of-the-art chip fabrication plants, as would be required to compete with NVIDIA, is a substantially resource-intensive undertaking, and contrasts directly with the relatively economical approach that Google, Microsoft, and Amazon have adopted, where the AI chips are designed in-house and then outsourced to a competent third party for manufacturing. As an inkling of the scope of this undertaking, consider that Sam Altman has reportedly been negotiating to raise between $8 billion and $10 billion from G42 alone.

These preliminary talks, however, can be complicated by extraneous developments. For instance, Abu Dhabi’s G42 AI-focused fund has attracted scrutiny from certain Congress members this month over its purported ties with blacklisted Chinese entities, including Huawei and Beijing Genomics Institute.

Meanwhile, as we reported in a dedicated post toward the end of December, OpenAI’s annual revenue reached $1.6 billion in 2023. The company is seeking to raise fresh funding at a valuation of around $100 billion.

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