Fearing a shortage of AI chips, Sam Altman plans to invest in a network of semicon factories

Fearing a shortage of AI chips, Sam Altman plans to invest in a network of semicon factories

Sam Altman, the CEO of OpenAI, is reportedly in discussions with major global investors to raise funds for a venture focused on establishing a network of semiconductor fabrication plants (fabs), according to sources familiar with the matter.

The ambitious project aims to address concerns about the growing demand for chips, particularly in the context of the increasing prevalence of artificial intelligence (AI) applications.

Altman has engaged in talks with potential investors, including G42 from Abu Dhabi and SoftBank Group, to raise substantial funds for the fabrication plants.

The project, still in its early stages, envisions collaboration with top chip manufacturers, and the network of fabs would have a global footprint. Altman’s push for fundraising underscores his apprehension that the current chip production forecasts may fall short of the anticipated demand, especially as AI continues to gain widespread adoption.

Unlike the approach adopted by many AI industry peers, such as Amazon, Google, and Microsoft, which is OpenAI’s largest investor, which designs custom silicon and outsources manufacturing, Altman’s vision involves building and maintaining semiconductor fabs.

Constructing a single state-of-the-art fabrication plant can require tens of billions of dollars, and Altman is reportedly seeking to establish a network of such facilities over the coming years.

The talks with potential investors, including G42, had initially focused on raising $8 billion to $10 billion. Altman emphasizes the urgency of taking action now to ensure an adequate chip supply by the end of the decade.

The demand for computing power and processors has surged due to the growing interest in AI applications since OpenAI released ChatGPT more than a year ago.

Major players in the chip fabrication market, including Intel Corp, Taiwan Semiconductor Manufacturing Company or TSMC, and Samsung Electronics, are seen as potential partners for OpenAI.

Altman had been actively involved in the chips project before his temporary removal as OpenAI CEO in November, and upon his return, he recommenced efforts to secure funding. Microsoft has also reportedly expressed interest in Altman’s semiconductor manufacturing plan.

While the talks are ongoing and a full list of partners and funders is yet to be established, Altman’s initiative represents a departure from the common approach within the AI industry and signals a strategic move to address the increasing chip demand.

(With inputs from agencies)