OpenAI plans to set up chip factories worth $100 billion: Report

OpenAI is planning to set up its own chip factories to keep up with market demand for chips required for AI and generative AI-related workloads.

The company’s CEO Sam Altman is holding discussions with several venture capital firms and other funding organizations to raise about $100 billion for a network of chip factories spread across the globe, according to a Bloomberg report.

Typically, chip factories, which include fabrication units of semiconductors, require huge investments as the machinery and technology involved in the setup process are very expensive.

Altman, reportedly, has spoken with AI firm G42, which is based in Abu Dhabi, and investment firm SoftBank Group. The new chip venture, if formed, will supply chips for AI-based workloads globally, Bloomberg reported citing sources.  

From G42, the company is looking to raise somewhere between $8 to $10 billion, according to the report. Earlier in October, G42 partnered with OpenAI to deliver AI-based services to local and regional markets.

In December, it was reported that the company was trying to raise $100 billion but at that time there was no information on what the new amount would be used for.

OpenAI to take on chipmakers

OpenAI’s bid comes at a time when several industry leaders and technology companies feel that the demand for AI and generative AI will require far more chips than are currently being produced.

Cloud and technology service providers, including Microsoft, IBM, AWS, and Google, have all designed their own custom AI chips in order to counter the shortage of GPUs or AI-based chips in the wake of market demand.

The global AI chip market size, which was valued at $14.9 billion in 2022, is predicted to grow at a compound annual rate of growth (CAGR) of 40.5% from 2023 to 2030 to touch $227.6 billion by 2030, according to a report from xResearch.

But while others are designing their custom silicon and leaving the manufacturing to traditional chipmakers, OpenAI is planning to do it all — design to manufacturing to supply.

According to a report, Altman has been working on a project, codenamed Tigris, which involves manufacturing semiconductors that can help them compete with Nvidia. Nvidia is the frontrunner when it comes to AI-based chips, according to analysts and experts.