OpenAI CEO Sam Altman Targets Trillions for Global AI and Chip Industry Revamp

OpenAI CEO Sam Altman is focusing on a new ambitious plan: to generate trillions of dollars to transform the world’s semiconductor industry. Altman is in discussions with potential investors, including the United Arab Emirates government, to raise funds for this tremendously ambitious technology initiative, according to sources. The project aims to increase the global capacity for chip production and enhance its ability to power artificial intelligence (AI), amongst other objectives. The cost of the project could range between $5 trillion to $7 trillion.

Addressing OpenAI’s Constraints

This fundraising effort is designed to address the challenges limiting OpenAI’s growth, including the shortage of expensive AI chips necessary for training large language models behind AI systems such as ChatGPT. Altman has frequently voiced concerns about the scarcity of these chips, known as graphics-processing units (GPUs), which are essential for OpenAI’s pursuit of artificial general intelligence - systems that are broadly smarter than humans.

The proposed investment sum would significantly exceed the current size of the global semiconductor industry. Last year’s global chip sales amounted to $527 billion and are projected to reach $1 trillion annually by 2030. Altman’s suggested funding levels would also be extraordinarily large by corporate fundraising standards, surpassing the national debts of some major global economies and exceeding the sizes of giant sovereign-wealth funds.

Altman’s Ambitious Plans

Altman’s fundraising discussions are the most recent representation of his ambitious plans to revolutionize the world. Previously, he has invested heavily in startups aiming to create cheap energy from nuclear fusion and extend the human lifespan by a decade. Energy is also a factor in Altman’s new fundraising plans, given the significant amounts of electricity consumed by AI facilities.

Potential Investors and Partners

As part of the discussions, Altman is proposing a partnership between OpenAI, various investors, chip manufacturers, and power providers. These parties would collectively contribute funds to establish chip foundries that would then be operated by existing chip manufacturers. OpenAI would commit to being a significant customer of these new factories. Funding for much of this initiative could come from debt.

Altman has recently met with several potential partners and investors for his project. Notably, he has met with the U.A.E.’s Sheikh Tahnoun bin Zayed al Nahyan, who is the country’s top security official and has a rapidly growing financial portfolio. He has also met with Masayoshi Son, the CEO of SoftBank, and representatives from chip-fabrication companies, including Taiwan Semiconductor Manufacturing Co. (TSMC). The discussions are still in early stages, and the project could span years and may not ultimately succeed.

The Impact of AI on Chip Supply and Demand

There is growing concern about the supply of chips and the electricity required to run them due to the increasing demand for artificial intelligence. AI chips have also become a component of the geopolitical battle between the U.S. and China for tech dominance, and the U.S. has imposed export restrictions on these chips.

Involvement with Microsoft

OpenAI has so far developed its AI technology using the computing resources of its partner Microsoft, whose valuation recently exceeded $3 trillion, partly due to investor enthusiasm about its AI efforts and relationship with OpenAI. Microsoft supports OpenAI’s efforts to raise funds to expand chip capacity. Altman has shared his plans with Microsoft’s CEO Satya Nadella and Chief Technology Officer Kevin Scott.

Challenges Ahead

Among the many challenges facing Altman’s initiative is the decision on where new chip plants would be built. He would prefer the U.S., where the Biden administration is expected to award billions of dollars in subsidies to TSMC and other major chip makers in the coming weeks to fund new factories. However, these companies face difficulties expanding in the U.S. due to delays, a shortage of skilled workers, and high costs. The U.S. government has also shown caution in allowing certain foreign governments to control the strategically important supply of microchips that power the digital economy.