OpenAI CEO Sam Altman Seeks $7 Trillion To Change The Face Of Chip Manufacturing: Report
OpenAI CEO Sam Altman is reportedly in talks with investors to raise trillions of dollars for an ambitious project aimed at boosting the production of semiconductors needed to run advanced artificial intelligence programs. Citing people familiar with the matter, the Wall Street Journal reported that Altman’s endeavors to transform global chip manufacturing could cost in the ballpark of $5 trillion to $7 trillion. The report added that Altman is in talks with investors, including the government of the United Arab Emirates.
The WSJ quoted an OpenAI spokesperson as saying that the company has had “productive discussions about increasing global infrastructure and supply chains” and more details will be shared at a later date.
Sam Altman’s Plans to Transform the Semiconductor Industry
As per the report, Altman in his pitch has proposed building dozens of chip foundries to boost production. These would then be run by existing chip makers, like the Taiwan Semiconductor Manufacturing Company (TSMC).
Taiwan Chip Giant TSMC Announces Second Japan Plant— Oxford News 牛津快讯（第三个号）英伦战队 (@oxvnews7) February 7, 2024
02/06/2024 #TSMC( #Taiwan #Semiconductor Manufacturing Company) will build a second foundry in #Japan, the semiconductor giant announced Tuesday, weeks before TSMC first in the country officially opens.。 pic.twitter.com/gnTcMTHKVQ
Altman aims to solve challenges in the way of OpenAI’s growth, including a scarcity of chips that power its AI models such as ChatGPT. Further, Altaman has held meetings with senior UAE officials, TSMC executives, US Secretary of Commerce Gina Raimondo, and SoftBank’s chief executive Masayoshi Son to discuss his plans, according to the report.
Microsoft is said to be aware of Altman’s plans and is supportive of the project, according to a New York Post report. Altman has reportedly looped in Microsoft CEO Satya Nadella and chief technology officer Kevin Scott about the ambitious project.
The US Congress has also taken various measures, like passing the CHIPS and Science Act, to boost domestic computer chip production to reduce the country’s reliance on China.
Altman had complained about the lack of powerful chips known as graphics-processing units, or GPUs to power OpenAI’s quest for artificial general intelligence, which it defines as systems broadly smarter than humans.
OpenAI boss Sam Altman predicts 'brutal' shortage of AI chips will ease next year https://t.co/0L61th8N83— Business Insider (@BusinessInsider) November 14, 2023
However, the WSJ described the sums being sought as “outlandishly large by the standards of corporate fundraising”. An investment in the sum of trillions of dollars would dwarf the current size of the global semiconductor industry.
Sam Altman's ask for funding his vast, globe-spanning network of semiconductor foundries is roughly the same amount that America spent on its wars from 2001 to 2020. pic.twitter.com/UTGaKhSyFu— Andrew Curran (@AndrewCurran_) February 10, 2024
Current Scenario of The Semiconductor Industry
While numerous countries have announced plans to support semiconductor production, the global supply is still dominated by a handful of firms, such as the Taiwan Semiconductor Manufacturing Company (TSMC) and California-based NVIDIA.
$NVDA launches new unit to create bespoke chips for cloud and AI providers ☁️— LuxAlgo (@LuxAlgo) February 9, 2024
Sam Altman, @OpenAI CEO, looks to deal Nvidia out by *seeking up to 7 Trillion* to launch his own semiconductor ambitions pic.twitter.com/hok6HfKKZS
This year, the Semiconductor Industry Association (SIA) has forecast a 13.1% jump in global chip sales to $595.3 billion, compared with a drop of about 8% in sales in 2023, according to a Foxbusiness report.
Further, the global sales of chips were $527 billion last year and are expected to rise to $1 trillion annually by 2030. The global sales of semiconductor manufacturing equipment, last year were $100 billion, and are expected to reach $124 billion in 2025, according to an estimate by the industry group SEMI.
Altman’s Previous Endevours in Chip Manufacturing
Altman has raised investments toward his endeavors in chip manufacturing. Right after Altman’s ouster as the CEO of OpenAI in November last year, he was reportedly seeking billions for a new and not-yet-formed chip venture code-named “Tigris” to compete with Nvidia. At the time he had even traveled to the Middle East to raise money from investors for the project, CNBC reported.
🔎 Sam Altman seeks to raise up to $7T from UAE, SoftBank to build chip plants in U.S. with TSMC’s help.— TheMacroSift.eth (@themacrosift) February 9, 2024
• Unclear why so much money is needed: global sales of semiconductor manufacturing equipment were $100B in 2023.
• U.S. plants may be hard, as TSMC’s efforts in… pic.twitter.com/Bwi4gogwfo
Previously in 2018, Altman personally invested in an AI chip startup called Rain Neuromorphics, based near OpenAI’s San Francisco headquarters. The following year, Altman’s company OpenAI signed a letter of intent to spend $51 million on Rain’s chips.
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