Artificial intelligence: Altman’s billion-dollar project – 01/19/2024 – Market

OpenAI CEO Sam Altman is working to raise billions of dollars from global investors for a chip venture. He intends to use the funds to establish a network of factories to manufacture semiconductors, according to several people with knowledge of the plans.

The CEO of the creator of ChatGPT has had conversations with several large potential investors in hopes of raising the large sums needed for chip manufacturing plants, or fabs, as they are known colloquially, said the people, who asked not to be identified because the conversations are private. .

According to the people interviewed, companies that had discussions with Altman include G42, based in Abu Dhabi, and SoftBank. The project would involve working with major chipmakers, and the network of fabs would be global, the sources said.

While efforts to raise funds for a chip venture were previously reported by Bloomberg, the project’s scope and manufacturing focus were not known. Negotiations are still at the beginning and a complete list of partners and financiers involved has not yet been established, said the people interviewed for the report.

Altman’s fundraising campaign reflects his concern that as AI becomes more widespread, there won’t be enough chips for widespread deployment. Some current production forecasts for AI-related chips do not meet projected demand.

Building and maintaining this network of factories for semiconductors is much more expensive than the approach preferred by many of OpenAI’s other competitors in the AI ​​industry. Amazon, Google and Microsoft — OpenAI’s biggest investor — generally focus on designing their own custom silicon and then outsource manufacturing to other companies.

Building a single state-of-the-art manufacturing plant can require tens of billions of dollars, and creating a network of such facilities would take years. Talks with G42 alone had focused on raising $8 billion to $10 billion, the people told Bloomberg previously. It is currently unknown how the negotiations are going.

Altman believes the industry needs to act now to ensure there is enough supply at the end of the decade, according to people familiar with his thinking.

Since OpenAI launched ChatGPT more than a year ago, interest in artificial intelligence applications has skyrocketed among businesses and consumers. This, in turn, has generated massive demand for the computing power and processors needed to build and run these AI programs. Altman has repeatedly stated that there are no longer enough chips for his company’s needs.

Intel, TSMC and Samsung lead the chip manufacturing market and are potential partners for OpenAI.

Altman worked intensively on the chip design until he was temporarily removed as CEO of OpenAI on November 17, 2023. Upon his return five days later, he resumed the project. Altman also discussed the plan with Microsoft, and the software giant is interested, according to two people interviewed.

OpenAI, G42, Intel, Microsoft, SoftBank and TSMC declined to comment. Samsung representatives were not immediately available to comment on the matter.

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

House China Select Committee Chairman Mike Gallagher, R-Wis., raised concerns about G42’s relationships with Chinese companies targeted by U.S. retaliation, including Huawei and the Beijing Genomics Institute, as well as risks to research in US universities.

Ed Ludlow, Dina Bass, Gillian Tan and Rachel Metz