OpenAI CEO Sam Altman is calling for an overhaul of the worldwide semiconductor industry via trillions of dollars in investments. A recent report from The Wall Street Journal has revealed that the artificial-intelligence industry executive is seeking significant investments to fund sweeping changes to the global semiconductor sector.
Altman has spoken of the demand and supply issue facing AI chips several times, noting that many artificial intelligence companies desperately want AI chips, but there simply aren’t enough to go around. According to The Wall Street Journal, Altman is considering a project that would boost the world’s AI chip-making capacity and allow companies such as OpenAI to access the chips they need to grow exponentially.
The report said Altman is currently in talks with investors, including the United Arab Emirates government, to fund the massive project. He would need an estimated $5 trillion to $7 trillion to fund the project, The Wall Street Journal said.
In a statement posted on X, Altman said OpenAI believes the world needs more artificial intelligence infrastructure than players in the industry plan to build. He said economic competitiveness would require massive-scale AI infrastructure as well as a resilient supply chain, and that OpenAI was willing to help achieve this monumental goal.
American graphic processing unit (GPU) company Nvidia currently has an 80% share of the AI chip market and was the largest winner of the 2023 generative AI boom. Nvidia now has a market cap of around $1.72 trillion and is poised to overtake tech giants such as Alphabet and Amazon in the next few years.
In the meantime, however, Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC), the largest chip maker on the globe, cannot meet the growing supply for AI chips. TSMC currently produces 90% of the globe’s super-advanced semiconductors and announced plans to build a second semiconductor plant in Arizona
The $7 trillion Altman believes he would need to overhaul the global semiconductor chip industry is larger than the current chip market and more than Microsoft’s and Apple’s market cap combined.
Tech giants such as Amazon and Microsoft are developing AI chips in-house to avoid high AI chip costs, but other companies without the same capabilities have no choice other than to buy the few available chips at market price.
In early February, the White House announced a $5 billion investment in semiconductor-related research and development to help accelerate domestic chip production in the United States. Such initiatives suggest that private companies such as C3.ai Inc. (NYSE: AI) may not be able to move the needle sufficiently on their own to address the demand for semiconductor chips at the pace that innovators require them.
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