Saturday, June 15, 2024

OpenAI CEO Sam Altman working to raise billions for network of AI chip factories

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OpenAI Chief Executive Officer Sam Altman, who has been working to raise billions of dollars from global investors for a chip venture, aims to use the funds to set up a network of factories to manufacture semiconductors, according to several people with knowledge of the plans.

Altman has had conversations with several large potential investors in the hopes of raising the vast sums needed for chip fabrication plants, or fabs, as they’re known colloquially, said the people, who requested anonymity because the conversations are private.

Firms that have held discussions with Altman include Abu Dhabi-based G42, people told Bloomberg last month, and SoftBank Group Corp., some of the people said. The project would involve working with top chip manufacturers, and the network of fabs would be global in scope, some of the people said.

While efforts to raise funds for a chip venture were earlier reported by Bloomberg, the scope of the project and the focus on manufacturing wasn’t previously known. The talks are still early and a full list of involved partners and funders hasn’t been established, the people said.

Altman’s fundraising push reflects his concern that as AI becomes more pervasive, there won’t be enough chips for widespread deployment, some of the people said. Some current forecasts for production of AI-related chips fall short of projected demand.

Building and maintaining fabs that manufacture semiconductors is far more expensive than the approach favored by many of OpenAI’s AI industry peers. Inc.Alphabet Inc.’s Google and Microsoft Corp. — OpenAI’s largest investor — typically focus on designing their own custom silicon and then farm out manufacturing to outside companies.

Constructing a single state-of-the-art fabrication plant can require tens of billions of dollars, and creating a network of such facilities would take years. The talks with G42 alone had focused on raising $8 billion to $10 billion, people told Bloomberg previously, although the current status of the discussions are unclear.

Altman believes the industry needs to act now to ensure there’s sufficient supply near the end of the decade, according to people familiar with his thinking. Since OpenAI released ChatGPT more than a year ago, interest in artificial intelligence applications has skyrocketed among companies and consumers. That in turn has spurred massive demand for the computing power and processors needed to build and run those AI programs. Altman has said repeatedly that there already aren’t enough chips for his company’s needs.

Intel Corp., Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. lead the chip fabrication market and are potential partners for OpenAI.

Read more: ChatGPT’s creator Sam Altman was asked what humans would still do better than AI—he didn’t have a convincing answer

Altman had been hard at work on the chips project until he was temporarily ousted as OpenAI CEO in November. Upon his return, he rekindled the efforts. Altman has also sounded out Microsoft on the plan, and the software giant is interested, according to two people.

OpenAI, G42, Intel, Microsoft, SoftBank and TSMC declined to comment. Samsung officials weren’t immediately available to comment.

G42, which focuses on artificial intelligence, has been the subject of calls this month by a key US lawmaker for greater scrutiny and trade restrictions.

House China Select Committee Chairman Mike Gallagher, a Republican from Wisconsin, raised concerns about G42’s relationships with blacklisted Chinese companies including Huawei Technologies Co. and Beijing Genomics Institute, as well as risks to research at US universities. Gallagher urged Commerce Secretary Gina Raimondo to consider sanctions on G42 and 13 of its subsidiaries and affiliates.

— With assistance from Ian King, Ben Bartenstein, and Yoolim Lee

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